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Lntroduction — What Is the Idea? 1 

I. The Beginning 21 

n. What I Learned About Business ... 33 

m. Starting the Real Business ..... 47 

IV. The Secret of Manufacturing and Serving 64 

V. Getting into Production 77 

VI. Machines and Men 91 

VII. The Terror of the Machine 103 

^11. Wages , 116 

IX. Why Not Always Have Good Business? . . 131 

X. How Cheaply Can Things Be Made? . . 141 

XI. Money and Goods 156 

H XII. Money — Master or Servant? .... 169 

Xni. Why Be Poor? 184 

XIV. The Tractor and Power Farming . . . 195 

XV. Why Charity? 206 

XVI. The Railroads 222 

XVII. Things in General 234 

XVin. Democracy and Industry 253 

XIX. What We May Expect 267 

Ini^x , o 285 



What Is the Idea? 

WE HAVE only started on our development of our 
country — ^we have not as yet, with all our talk 
of wonderful progress, done more than scratch 
the surface. The progress has been wonderful enough — 
but when we compare what we have done with what there 
is to do, then our past accomplishments are as nothing. 
When we consider that more power is used merely in 
ploughing the soil than is used in all the industrial estab- 
lishments of the country put together, an inkling comes 
of how much opportunity there is ahead. And now, with 
so many countries of the world in ferment and with so 
much unrest everywhere, is an excellent time to suggest 
something of the things that may be done — ^in the light 
of what has been done. 

When one speaks of increasing power, machinery, and 
industry there comes up a picture of a cold, metallic sort 
of world in which great factories will drive away the trees, 
the flowers, the birds, and the green fields. And that 
then we shall have a world composed of metal machines 
and human machines. With all of that I do not agree. 
I think that unless we know more about machines and 
their use, unless we better understand the mechanical 
portion of life, we cannot have the time to enjoy the trees, 
and the birds, and the flowers, and the green fields. 

I think that we have already done too much toward 


banishing the pleasant things from life by thinking that 
there is some opposition between living and providing the 
means of living. We waste so much time and energy that 
we have little left over in which to enjoy ourselves. 
Power and machinery, money and goods, are useful only 
as they set us free to live. They are but means to an end. 
For instance, I do not consider the machines which bear 
my name simply as machines. If that was all there was 
to it I would do something else. I take them as concrete 
evidence of the working out of a theory of business which 
I hope is something more than a theory of business — a 
theory that looks toward making this world a better place 
in which to live. The fact that the commercial success of 
the Ford Motor Company has been most unusual is im- 
portant only because it serves to demonstrate, in a way 
which no one can fail to understand, that the theory to 
date is right. Considered solely in this light I can crit- 
icize the prevailing system of industry and the organi- 
zation of money and society from the standpoint of one 
who has not been beaten by them. 

As things are now organized, I could, were I thinking 
only selfishly, ask for no change. If I merely want 
money the present system is all right; it gives money in 
plenty to me. But I am thinking of service. The pres- 
ent system does not permit of the best service because it 
encourages every kind of waste — it keeps many men from 
getting the full return from service. And it is going no- 
where. It is all a matter of better planning and adjust- 

I have no quarrel with the general attitude of scoflSng 
at new ideas. It is better to be skeptical of all new ideas 
land to insist upon being shown rather than to rush around 
^ a continuous brainstorm after every new idea. Skep- 
ticism, if by that we mean cautiousness, is the balance 
wheel of civiUzation. Most of the present acute troubles 


of the world arise out of taking on new ideas without first 
carefully investigating to discover if they are good ideas* 
An idea is not necessarily good because it is old, or neces- 
sarily bad because it is new, but if an old idea works, then 
the weight of the evidence is all in its favour. Ideas are 
of themselves extraordinarily valuable, but an idea is just 
an idea. Almost any one can think up an idea. The 
thing that counts is developing it into a practical product. 

I am now most interested in fully demonstrating that 
the ideas we have put into practice are capable of the 
largest application — that they have nothing peculiarly 
to do with motor cars or tractors but form something in 
the nature of a universal code. I am quite certain that it 
is the natural code and I want to demonstrate it so thor- 
oughly that it will be accepted, not as a new idea, but as 
a natural code. 

The natural thing to do is to work — to recognize that 
prosperity and happiness can be obtained only through 
honest effort. Human ills flow largely from attempting to 
escape from this natural course. I have no suggestion 
which goes beyond accepting in its fullest this principle of 
nature. I take it for granted that we must work. All 
that we have done comes as the result of a certain insistence 
that since we must work it is better to work intelligently 
and forehandedly; that the better we do our work the 
better off we shall be. All of which I conceive to be merely 
elemental common sense. 

I am not a reformer. I think there is entirely too 
much attempt at reforming in the world and that we pay 
too much attention to reformers. We have two kinds 
of reformers. Both are nuisances. The man who calls 
himself a reformer wants to smash things. He is the 
sort of man who would tear up a whole shirt because the 
collar button did not fit the buttonhole. It would never 
occur to him to enlarge the buttonhole. This sort of re- 


former never under any circumstances knows what he is 
doing. Experience and reform do not go together. A 
reformer cannot keep his zeal at white heat in the pres- 
ence of a fact. He must discard all facts. 

Since 1914 a great many persons have received brand- 
new intellectual outfits. Many are beginning to think 
for the first time. They opened their eyes and realized 
that they were in the world. Then, with a thrill of m- 
dependence, they realized that they could look at the 
world critically. They did so and found it faulty. The 
intoxication of assuming the masterful position of a critic 
of the social system— which it is every man's right to 
assum^is unbalancing at first. The very young critic 
is very much unbalanced. He is strongly in favour of 
wiping out the old order and starting a new one. They 
actually managed to start a new world in Russia. It is 
there that the work of the world makers can best be 
studied. We learn from Russia that it is the minority 
and not the majority who determine destructive action. 
We learn also that while men may decree social lawsm 
conflict with natural laws, Nature vetoes those laws more 
ruthlessly than did the Czars. Nature has vetoed the 
whole Soviet Republic. For it sought to deny Nature. 
It denied above all else the right to the fruits of labour. 
Some people say, "Russia will have to go to work," but 
that does not describe the case. The fact is that poor 
Russia is at work, but her work counts for nothing. It is 
not free work. In the United States a workman works 
eight hours a day; in Russia, he works twelve to fourteen. 
In the United States, if a workman wishes to lay off a day 
or a week, and is able to afford it, there is nothing to pre- 
vent him. In Russia, under Sovietism, the workman 
goes to work whether he wants to or not. The freedom 
of the citizen has disappeared in the discipline of a prison- 
like monotony in which aU are treated alike. That is 


slavery. Freedom is the right to work a decent length 
of time and to get a decent Uving for doing so; to be able 
to arrange the little personal details of one's own life. 
It is the aggregate of these and many other items of free- 
dom which makes up the great idealistic Freedom. The 
minor forms of Freedom lubricate the everyday life of all 
of us. 

Russia could not get along without intelligence and 
experience. As soon as she began to run her factories by 
committees, they went to rack and ruin; there was more 
debate than production. As soon as they threw out the 
skilled man, thousands of tons of precious materials were 
spoiled. The fanatics talked the people into starvation. 
The Soviets are now offering the engineers, the adminis- 
trators, the foremen and superintendents, whom at first 
they drove out, large sums of money if only they will 
come back. Bolshevism is now crying for the brains and 
experience which it yesterday treated so ruthlessly. All 
that "reform" did to Russia was to block production. 

There is in this country a sinister element that desires 
to creep in between the men who work with their hands 
and the men who think and plan for the men who work 
with their hands. The same influence that drove the brains, 
experience, and ability out of Russia is busily engaged in 
raising prejudice here. We must not suffer the stranger > 
the destroyer, the hater of happy humanity, to divide 
our people. In unity is American strength — and freedom. 

On the other hand, we have a different kind of reformer 
who never calls himself one. He is singularly like the 
radical reformer. The radical has had no experience and 
does not want it. The other class of reformer has had 
plenty of experience but it does him no good. I refer to 
the reactionary — who will be surprised to find himself put 
in exactly the same class as the Bolshevist. He wants to 
go back to some previous condition, not because it was 


the best condition, but because he thinks he knows about 
tliat condition. 

The one crowd wants to smash up the whole world 
in order to make a better one. The other holds the world 
as so good that it might well be let stand as it is — and 
decay. The second notion arises as does the first — out 
of not using the eyes to see with. It is perfectly possible 
to smash this world, but it is not possible to build a new 
one. It is possible to prevent the world from going for- 
ward, but it is not possible then to prevent it from going 
back — from decaying. It is foolish to expect that, if 
everything be overturned, everyone will thereby get three 
meals a day. Or, should everything be petrified, that 
thereby six per cent, interest may be paid. The trouble 
is that reformers and reactionaries alike get away from 
the realities — from the primary functions. 

One of the counsels of caution is to be very certain 
that we do not mistake a reactionary turn for a return 
of common sense. We have passed through a period of 
fireworks of every description, and the making of a great 
many idealistic maps of progress. We did not get any- 
where. It was a convention, not a march. Lovely 
things were said, but when we got home we found the 
furnace out. Reactionaries have frequently taken ad- 
vantage of the recoil from such a period, and they have 
promised "the good old times" — which usually means the 
bad old abuses — and because they are perfectly void of 
vision they are sometimes regarded as "practical men." 
Their return to power is often hailed as the return of 
common sense. 

The primary functions are agriculture, manufacture., 
and transportation. Community life is impossible with- 
out them. They hold the world together. Raising 
things, making things, and carrying things are as 
primitive as human need and yet as modern as anything 


can be. They are of the essence of physical life. When 
they cease, community life ceases. Things do get out of 
shape in this present world under the present system, 
but we may hope for a betterment if the foundations 
stand sure. The great delusion is that one may change 
the foundation — usurp the part of destiny in the social 
process. The foundations of society are the men and 
means to grow things, to make things, and to carry things. 
As long as agriculture, manufacture, and transportation 
survive, the world can survive any economic or social 
change. As we serve our jobs we serve the world. 

There is plenty of work to do. Business is merely 
work. Speculation in things already produced — that 
is not business. It is just more or less respectable graft. 
But it cannot be legislated out of existence. Laws can 
do very little. Law never does anything constructive. 
It can never be more than a policeman, and so it is a waste 
of time to look to our state capitals or to Washington to 
do that which law was not designed to do. As long as 
we look to legislation to cure poverty or to abolish 
special privilege we are going to see poverty spread 
and special privilege grow. We have had enough of look- 
ing to Washington and we have had enough of legislators 
— not so much, however, in this as in other countries — 
promising laws to do that which laws cannot do. 

When you get a whole country — as did ours — thinking 
that Washington is a sort of heaven and behind its clouds 
dwell omniscience and omnipotence, you are educating 
that country into a dependent state of mind which 
augurs ill for the future. Our help does not come from 
Washington, but from ourselves; our help may, howevery 
go to Washington as a sort of central distribution point 
where all our efforts are coordinated for the general good. 
We may help the Government; the Government cannot 
help us. 


The slogan of "less government in business and more 
business in government" is a very good one, not mainly 
on account of business or government, but on account of 
tlie people. Business is not the reason why the United 
States was founded. The Declaration of Independence 
is not a business charter, nor is the Constitution of the 
United States a commercial schedule. The United 
States — its land, people, government, and business — 
are but methods by which the life of the people is made 
worth while. The Government is a servant and never 
should be anything but a servant. The moment the 
people become adjuncts to government, then the law of 
retribution begins to work, for such a relation is unnatural, 
immoral, and inhuman. We cannot live without business 
and we cannot live without government. Business and 
government are necessary as servants, like water and 
grain; as masters they overturn the natural order. 

The welfare of the country is squarely up to us as in" 
dividuals. That is where it should be and that is where it 
is safest. Governments can promise something for noth^ 
ing but they cannot deliver. They can juggle the cur- 
rencies as they did in Europe (and as bankers the world 
over do, as long as they can get the benefit of the juggling) 
with a patter of solemn nonsense. But it is work and 
work alone that can continue to deliver the goods — and 
that, down in his heart, is what every man knows. 

There is little chance of an intelligent people, such as 
ours, ruining the fundamental processes of economic life. 
Most men know they cannot get something for nothing. 
Most men feel — even if they do not know — that money is 
not wealth. The ordinary theories which promise every- 
thing to everybody, and demand nothing from anybody, 
are promptly denied by the instincts of the ordinary 
man, even when he does not find reasons against them. 
He knows they are wrong. That is enough. The present 


order, always clumsy, often stupid, and in many ways im- 
perfect, has this advantage over any other — it works. 
Doubtless our order will merge by degrees into another, 
and the new one will also work — but not so much by 
reason of what it is as by reason of what men will bring 
into it. The reason why Bolshevism did not work, and 
cannot work, is not economic. It does not matter 
whether industry is privately managed or socially con- 
trolled; it does not matter whether you call the workers 
share "wages" or "dividends"; it does not matter whether 
you regimentalize the people as to food, clothing, and 
shelter, or whether you allow them to eat, dress, and live 
as they like. Those are mere matters of detail. The 
incapacity of the Bolshevist leaders is indicated by the 
fuss they made over such details. Bolshevism failed be- 
cause it was both unnatural and immoral. Our system 
stands. Is it wrong.? Of course it is wrong, at a thousand 
points! Is it clumsy.?— of course it is clumsy. By all 
right and reason it ought to break down. But it doesi 
not— because it is instinct with certain economic and 
moral fundamentals. 

The economic fundamental is labour. Labour is the hu- 
man element which makes the fruitful seasons of the earth 
useful to men. It is men 's labour that makes the harvest 
what It is. That is the economic fundamental: every 
one of us is working with material which we did not and 
could not create, but which was presented to us by Nature. 

The moral fundamental is man's right in his labour. 
This is variously stated. It is sometimes called "the 
right of property." It is sometimes masked in the com- 
mand, "Thou shalt not steal." It is the other man's 
right in his property that makes stealing a crime. When 
a man has earned his bread, he has a right to that bread. 
If another steals it, he does more than steal bread; he 
invades a sacred human right. 


If we cannot produce we cannot have — ^but some say 
if we produce it is only for the capitalists. Capitahsts 
who become such because they provide better means of 
production are of the foundation of society. They have 
really nothing of their own. They merely manage prop- 
^ erty for the benefit of others. Capitalists who become 
such through trading in money are a temporarily neces- 
sary evil. They may not be evil at all if their money goes 
to production. If their money goes to complicating dis- 
tribution — to raising barriers between the producer and 
the consumer — then they are evil capitalists and they 
will pass away when money is better adjusted to work; 
and money will become better adjusted to work when it is 
fully realized that through work and work alone may 
health, wealth, and happiness inevitably be secured. 

There is no reason why a man who is willing to work 
should not be able to work and to receive the full value, 
of his work. There is equally no reason why a man who 
can but will not work should not receive the full value of 
his services to the community. He should most certainly 
be permitted to take away from the community an equiva- 
lent of what he contributes to it. If he contributes noth- 
ing he should take away nothing. He should have the 
freedom of starvation. We are not getting anywhere 
when we insist that every man ought to have more than 
he deserves to have — ^just because some do get more than 
they deserve to have. 

There can be no greater absurdity and no greater dis- 
service to humanity in general than to insist that all men 
are equal. Most certainly all men are not equal, and any 
democratic conception which strives to make men equal 
is only an effort to block progress. Men cannot be of 
equal service. The men of larger ability are less numerous 
than the men of smaller ability; it is possible for a mass of 
the smaller men to pull the larger ones down — but in so 


doing they pull themselves down. It is the larger men 
who give the leadership to the community and enable the 
smaller men to live with less effort. 

The conception of democracy which names a levelling- 
down of ability makes for waste. No two things in nature 
are alike. We build our cars absolutely interchangeable. 
All parts are as nearly alike as chemical analysis, the 
finest machinery, and the finest workmanship can make 
them. No fitting of any kind is required, and it would 
certainly seem that two Fords standing side by side, look- 
ing exactly alike and made so exactly alike that any part 
could be taken out of one and put into the other, would be 
alike. But they are not. They will have different road 
habits. We have men who have driven hundreds, and in 
some cases thousands, of Fords and they say that no two 
ever act precisely the same — that, if they should drive a 
new car for an hour or even less and then the car were 
mixed with a bunch of other new ones, also each driven for 
a single hour and under the same conditions, that al- 
though they could not recognize the car they had been 
driving merely by looking at it, they could do so by driv- 
ing it. 

I have been speaking in general terms. Let us be more 
concrete. A man ought to be able to live on a scale com- 
mensurate with the service that he renders. This is 
rather a good time to talk about this point, for we have 
recently been through a period when the rendering of ser- 
vice was the last thing that most people thought of. We 
were getting to a place where no one cared about costs or 
service. Orders came without effort. A^liereas once it 
was the customer who favoured the merchant by dealing 
with him, conditions changed until it was the merchant 
who favoured the customer by selling to him. That is 
bad for business. Monopoly is bad for business. Profi- 
teering is bad for business. The lack of necessity to 


hustle is bad for business. Business is never as healthy 
as when, like a chicken, it must do a certain amount of 
scratching for what it gets. Things were coming too eas- 
ily. There was a let-down of the principle that an honest 
relation ought to obtain between values and prices. The 
public no longer had to be "catered to." There was even 
a " public be damned" attitude in many places. It was in- 
tensely bad for business. Some men called that abnormal 
condition "prosperity." It was not prosperity — it was 
just a needless money chase. Money chasing is not busi- 

It is very easy, unless one keeps a plan thoroughly in 
mind, to get burdened with money and then, in an effort 
to make more money, to forget all about selling to the 
people what they want. Business on a money-making 
basis is most insecure. It is a touch-and-go affair, mov- 
ing irregularly, and rarely over a term of years amount- 
ing to much. It is the function of business to produce 
for consumption and not for money or speculation. Pro- 
ducing for consumption implies that the quality of the 
article produced will be high and that the price will be 
low — ^that the article be one which serves the people and 
not merely the producer. If the money feature is twisted 
out of its proper perspective, then the production will be 
twisted to serve the producer. 

The producer depends for his prosperity upon serving 
the people. He may get by for a while serving himself, 
but if he does, it will be purely accidental, and when the 
people wake up to the fact that they are not being served, 
the end of that producer is in sight. During the boom 
period the larger effort of production was to serve itself 
and hence, the moment the people woke up, many pro- 
ducers went to smash. They said that they had entered 
into a "period of depression." Really they had not. 
They were simply trying to pit nonsense against sense — 


which is something that cannot successfully be done. 
Being greedy for money is the surest way not to get it, but 
when one serves for the sake of service — for the satisfac^ 
tion of doing that which one believes to be right — then 
money abundantly takes care of itself. 

Money comes naturally as the result of service. And 
it is absolutely necessary to have money. But we do not 
want to forget that the end of money is not ease but the 
opportunity to perform more service. In my mind noth- 
ing is more abhorrent than a life of ease. None of us has 
any right to ease. There is no place in civilization for the 
idler. Any scheme looking to abolishing money is only 
making affairs more complex, for we must have a measure. 
That our present system of money is a satisfactory basis 
for exchange is a matter of grave doubt. That is a question 
which I shall talk of in a subsequent chapter. The gist of 
my objection to the present monetary system is that it tends 
to become a thing of itself and to block instead of facilitate 

My effort is in the direction of simplicity. People in 
general have so little and it costs so much to buy even the 
barest necessities (let alone that share of the luxuries to 
which I think everyone is entitled) because nearly every- 
thing that we make is much more complex than it needs 
to be. Our clothing, our food, our household furnishings 
— all could be much simpler than they now are and at the 
same time be better looking. Things in past ages were 
made in certain ways and makers since then have just 

I do not mean that we should adopt freak styles. There 
is no necessity for that. Clothing need not be a bag with 
a hole cut in it. That might be easy to make but it would 
be inconvenient to wear. A blanket does not require 
much tailoring, but none of us could get much work done 
if we went around Indian-fashion in blankets. Real 


simplicity means that which gives the very best service 
and is the most convenient in use. The trouble with 
drastic reforms is they always insist that a man be made 
over in order to use certain designed articles. I think 
that dress reform for women — which seems to mean ugly 
clothes — must always originate with plain women who 
want to make everyone else look plain. That is not the 
right process. Start with an article that suits and then 
study to find some way of eliminating the entirely useless 
parts. This applies to everything — a shoe, a dress, a 
house, a piece of machinery, a railroad, a steamship, an 
airplane. As we cut out useless parts and simplify neces- 
sary ones we also cut down the cost of making. This is 
simple logic, but oddly enough the ordinary process starts 
with a cheapening of the manufacturing instead of with a 
simplifying of the article. The start ought to be with 
the article. First we ought to find whether it is as well 
made as it should be — does it give the best possible ser-r 
vice? Then — are the materials the best or merely the 
most expensive.'' Then — can its complexity and weight 
be cut down.'* And so on. 

There is no more sense in having extra weight in an 
article than there is in the cockade on a coachman's hat. 
In fact, there is not as much. For the cockade may help 
the coachman to identify his hat while the extra weight 
means only a waste of strength. I cannot imagine where 
the delusion that weight means strength came from. It 
is all well enough in a pile-driver, but why move a heavy 
weight if we are not going to hit anything with it.^* In 
transportation why put extra weight in a machine.? 
Why not add it to the load that the machine is designed 
to carry .?* Fat men cannot run as fast as thin men but we 
build most of our vehicles as though dead-weight fat 
increased speed! A deal of poverty grows out of the 
carriage of excess weight. 


Some day we shall discover how further to eliminate 
weight. Take wood, for example. For certain purposes 
wood is now the best substance we know, but wood is 
extremely wasteful. The wood in a Ford car contains thirty 
pounds of water. There must be some way of doing better 
than that. There must be some method by which we can 
gain the same strength and elasticity without having to 
lug useless weight. And so through a thousand processes. 

The farmer makes too complex an affair out of his daily 
work. I believe that the average farmer puts to a really 
useful purpose only about 5 per cent, of the energy that 
he spends. If any one ever equipped a factory in the style, 
say, the average farm is fitted out, the place would be 
cluttered with men. The worst factory in Europe is 
hardly as bad as the average farm barn. Power is utilized 
to the least possible degree. Not only is everything done 
by hand, but seldom is a thought given to logical arrange- 
ment. A farmer doing his chores will walk up and down a 
rickety ladder a dozen times. He will carry water for 
years instead of putting in a few lengths of pipe. His 
whole idea, when there is extra work to do, is to hire extra 
men. He thinks of putting money into improvements as 
an expense. Farm products at their lowest prices are 
dearer than they ought to be. Farm profits at their high- 
est are lower than they ought to be. It is waste motion — 
waste effort — that makes farm prices high and profits low. 

On my own farm at Dearborn we do everything by 
machinery. We have eliminated a great number of 
wastes, but we have not as yet touched on real economy. 
We have not yet been able to put in five or ten years of 
intense night-and-day study to discover what really ought 
to be done. We have left more undone than w^ have 
done. Yet at no time — ^no matter what the value of 
crops — ^have we failed to turn a first-class profit. We are 
not farmers — we are industrialists on the farm. The* 


moment the farmer considers himself as an industrialist, 
with a horror of waste either in material or in men, then 
we are going to have farm products so low-priced that 
all will have enough to eat, and the profits will be so sat- 
isfactory that farming will be considered as among the 
least hazardous and most profitable of occupations. 

Lack of knowledge of what is going on and lack of 
knowledge of what the job really is and the best way of 
doing it are the reasons why farming is thought not to pay. 
Nothing could pay the way farming is conducted. The 
farmer follows luck and his forefathers. He does not 
know how economically to produce, and he does not know 
how to market. A manufacturer who knew how neither 
to produce nor to market would not long stay in business. 
That the farmer can stay on shows how wonderfully 
profitable farming can be. 

The way to attain low-priced, high-volume production 
in the factory or on the farm — and low-priced, high-vol- 
ume production means plenty for everyone — is quite sim- 
ple. The trouble is that the general tendency is to 
complicate very simple affairs. Take, for an instance, an 

When we talk about improvements usually we have in 
mind some change in a product. An "improved" prod- 
uct is one that has been changed. That is not my idea. 
I do not believe in starting to make until I have discovered 
the best possible thing. This, of course, does not mean that 
a product should never be changed, but I think that it 
will be found more economical in the end not even to try 
to produce an article until you have fully satisfied your- 
self that utility, design, and material are the best. If 
your researches do not give you that confidence, then keep 
right on searching until you find confidence. The place 
to start manufacturing is with the article. The factory, 
the organization, the selling, and the financial plans will 


shape themselves to the article. You will have a cutting 
edge on your business chisel and in the end you will save 
time. Rushing into manufacturing without being certain 
of the product is the unrecognized cause of many business 
failures. People seem to think that the big thing is the 
factory or the store or the financial backing or the manage- 
ment. The big thing is the product, and any hurry in 
getting into fabrication before designs are completed is 
just so much waste time. I spent twelve years before I 
had a Model T — which is what is known to-day as the 
Ford car — that suited me. We did not attempt to go 
into real production until we had a real product. That 
product has not been essentially changed. 

We are constantly experimenting with new ideas. If 
you travel the roads in the neighbourhood of Dearborn 
you can find all sorts of models of Ford cars. They are 
experimental cars — they are not new models. I do not 
believe in letting any good idea get by me, but I will not 
quickly decide whether an idea is good or bad. If an idea 
seems good or seems even to have possibilities, I believe in 
doing whatever is necessary to test out the idea from every 
angle. But testing out the idea is something very differ- 
ent from making a change in the car. Where most manu- 
facturers find themselves quicker to make a change in the 
product than in the method of manufacturing — we follow 
exactly the opposite course. 

Our big changes have been in methods of manufactur- 
ing. They never stand still. I believe that there is 
hardly a single operation in the making of our car that is 
the same as when we made our first car of the present 
model. That is why we make them so cheaply. The few 
changes that have been made in the car have been in the 
direction of convenience in use or where we found that a 
change in design might give added strength. The mate- 
rials in the car change as we learn more and more about 


materials. Also we do not want to be held up in produc- 
tion or have the expense of production increased by any- 
possible shortage in a particular material, so we have for 
most parts worked out substitute materials. Vanadium 
steel, for instance, is our principal steel. With it we can 
get the greatest strength with the least weight, but it 
would not be good business to let our whole future depend 
upon being able to get vanadium steel. We have worked 
out a substitute. All our steels are special, but for every 
one of them we have at least one, and sometimes several, 
fully proved and tested substitutes. And so on through 
all of our materials and likewise with our parts. In the 
beginning we made very few of our parts and none of our 
motors. Now we make all our motors and most of oui 
parts because we find it cheaper to do so. But also we 
aim to make some of every part so that we cannot be caught 
in any market emergency or be crippled by some outside 
manufacturer being unable to fill his orders. The prices 
on glass were run up outrageously high during the war; 
we are among the largest users of glass in the country. 
Now we are putting up our own glass factory. If we 
had devoted all of this energy to making changes in the 
product we should be nowhere; but by not changing the 
product we are able to give our energy to the improve- 
ment of the making. 

The principal part of a chisel is the cutting edge. If 
there is a single principle on which our business rests it is 
that. It makes no difference how finely made a chisel is 
or what splendid steel it has in it or how well it is forged — 
if it has no cutting edge it is not a chisel. It is just a piece 
of metal. All of which being translated means that it is 
what a thing does — not what it is supposed to do — that 
matters. What is the use of putting a tremendous force 
behind a blunt chisel if a light blow on a sharp chisel will 
do the work.f^ The chisel is there to cut, not to be ham- 


mered. The hammering is only incidental to the Job. 
So if we want to \7ork why not concentrate on the work 
and do it in the quickest possible fashion? The cutting 
edge of merchandising is the point where the product 
touches the consumer. An unsatisfactory product is one 
that has a dull cutting edge. A lot of waste effort is 
needed to put it through. The cutting edge of a factory 
is the man and the machine on the job. If the man is not 
right the machine cannot be; if the machine is not right 
the man cannot be. For any one to be required to use 
more force than is absolutely necessary for the job in hand 
is waste. 

The essence of my idea then is that waste and greed 
block the delivery of true service. Both waste and greed 
are unnecessary. Waste is due largely to not understand* 
ing what one does, or being careless in the doing of it. 
Greed is merely a species of nearsightedness. I have 
striven toward manufacturing with a minimum of waste, 
both of materials and of human effort, and then toward 
distribution at a minimum of profit, depending for the total 
profit upon the volume of distribution. In the process of 
manufacturing I want to distribute the maximum of wage 
— that is, the maximum of buying power. Since also this 
makes for a minimum cost and we sell at a minimum 
profit, we can distribute a product in consonance with 
buying power. Thus everyone who is connected with us 
• — either as a manager, worker, or purchaser — is the better 
for our existence. The institution that we have erected 
is performing a service. That is the only reason I have 
for talking about it. The principles of that service are 

1. An absence of fear of the future and of veneration 
for the past. One who fears the future, who fears failure, 
limits his activities. Failure is only the opportunity 
more intelligently to begin again. There is no disgrace in 


honest failure; there is disgrace in fearing to fail. What 
is past is useful only as it suggests ways and means for 

2. A disregard of competition. Whoever does a thing 
best ought to be the one to do it. It is criminal to try to 
get business away from another man — criminal because 
one is then trying to lower for personal gain the condition 
of one 's fellow man — to rule by force instead of by intelli- 

3. The putting of service before profit. Without a 
profit, business cannot extend. There is nothing in- 
herently wrong about making a profit. Well-conducted 
business enterprise cannot fail to return a profit, but 
profit must and inevitably will come as a reward for good 
service. It cannot be the basis — it must be the result of 

4. Manufacturing is not buying low and selling high. 
It is the process of buying materials fairly and, with the 
smallest possible addition of cost, transforming those 
materials into a consumable product and giving it to the 
consumer. Gambling, speculating, and sharp dealing, 
tend only to clog this progression. 

How all of this arose, how it has worked out, and how it 
applies generally are the subjects of these chapters. 


The Beginning of Business 

ON MAY 31, 1921, the Ford Motor Company 
turned out Car No. 5,000,000. It is out in my mu- 
. seum along with the gasoHne buggy that I began 
work on thirty years before and which first ran satisfactor- 
ily along in the spring of 1893. I was running it when the 
bobolinks came to Dearborn and they always come on 
April 2nd. There is all the difference in the world in the 
appearance of the two vehicles and almost as much dif- 
ference in construction and materials, but in fundamentals 
the two are curiously alike — except that the old buggy has 
on it a few wrinkles that we have not yet quite adopted 
in our modern car. For that first car or buggy, even 
though it had but two cylinders, would make twenty miles 
an hour and run sixty miles on the three gallons of gas the 
little tank held and is as good to-day as the day it was 
built. The development in methods of manufacture and 
in materials has been greater than the development in 
basic design. The whole design has been refined ; the pres- 
ent Ford car, which is the "Model T," has four cylinders 
and a self starter — it is in every way a more convenient 
and an easier riding car. It is simpler than the first car. 
But almost every point in it may be found also in the first 
car. The changes have been brought about through ex- 
perience in the making and not through any change in the 
basic principle — which I take to be an important fact 
demonstrating that, given a good idea to start with, 
it is better to concentrate on perfecting it than to hunt 


around for a new idea. One idea at a time is about as 
much as any one can handle. 

It was Hfe on the farm that drove me into devising ways 
and means to better transportation. I was born on July 
30, 1863, on a farm at Dearborn, Michigan, and my earli- 
est recollection is that, considering the results, there was 
too much work on the place. That is the way I still feel 
about farming. There is a legend that my parents were 
very poor and that the early days were hard ones. Cer- 
tainly they were not rich, but neither were they poor. As 
Michigan farmers went, we were prosperous. The house 
in which I was born is still standing, and it and the farm 
are part of my present holding. 

There was too much hard hand labour on our own and 
all other farms of the time. Even when very young I 
suspected that much might somehow be done in a better 
way. That is what took me into mechanics — although 
my mother always said that I was born a mechanic. I 
had a kind of workshop with odds and ends of metal for 
tools before I had anything else. In those days we did 
not have the toys of to-day; what we had were home made. 
My toys were all tools — they still are ! And every frag- 
ment of machinery was a treasure. 

The biggest event of those early years was meeting with 
a road engine about eight miles out of Detroit one day 
when we were driving to town. I was then twelve years 
old. The second biggest event was getting a watch — 
which happened in the same year. I remember that en- 
gine as though I had seen it only yesterday, for it was the 
first vehicle other than horse-drawn that I had ever seen. 
It was intended primarily for driving threshing machines 
and sawmills and was simply a portable engine and boiler 
mounted on wheels with a water tank and coal cart trail- 
ing behind. I had seen plenty of these engines hauled 
around by horses, but this one had a chain that made a 


connection between the engine and the rear wheels of the 
wagon-like frame on which the boiler was mounted. The 
engine was placed over the boiler and one man standing 
on the platform behind the boiler shovelled coal, managed 
the throttle, and did the steering. It had been made by 
Nichols, Shepard & Company of Battle Creek. I found 
that out at once. The engine had stopped to let us pass 
with our horses and I was off the wagon and talking to the 
engineer before my father, who was driving, knew what 
I was up to. The engineer was very glad to explain the 
whole affair. He was proud of it. He showed me how 
the chain was disconnected from the propelling wheel 
and a belt put on to drive other machinery. He told me 
that the engine made two hundred revolutions a minute 
and that the chain pinion could be shifted to let the wagon 
stop while the engine was still running. This last is a 
feature which, although in different fashion, is incorpor- 
ated into modern automobiles. It was not important 
with steam engines, which are easily stopped and started, 
but it became very important with the gasoline engine. 
It was that engine which took me into automotive trans- 
portation. I tried to make models of it, and some years 
later I did make one that ran very well, but from the 
time I saw that road engine as a boy of twelve right for- 
ward to to-day, my great interest has been in making a 
machine that would travel the roads. Driving to town I 
always had a pocket full of trinkets — nuts, washers, and 
odds and ends of machinery. Often I took a broken 
watch and tried to put it together. When I was thirteen 
I managed for the first time to put a watch together so that 
it would keep time. By the time I was fifteen I could do 
almost anything in watch repairing — although my tools 
were of the crudest. There is an immense amount to be 
learned simply by tinkering with things. It is not possi- 
ble to learn from books how everything is made — and a 


real mechanic ought to know how nearly everything is 
made. Machines are to a mechanic what books are to 
a writer. He gets ideas from them, and if he has any 
brains he will apply those ideas. 

From the beginning I never could work up much in- 
terest in the labour of farming. I wanted to have some- 
thing to do with machinery. My father was not entirely 
in sympathy with my bent toward mechanics. He 
thought that I ought to be a farmer. When I left school 
at seventeen and became an apprentice in the machine 
shop of the Drydock Engine Works I was all but given up 
for lost. I passed my apprenticeship without trouble — 
that is, I was qualified to be a machinist long before my 
three-year term had expired — and having a liking for 
fine work and a leaning toward watches I worked nights 
at repairing in a jewellery shop. At one period of those 
early days I think that I must have had fully three hun- 
dred watches. I thought that I could build a serviceable 
watch for around thirty cents and nearly started in the 
business. But I did not because I figured out that watches 
were not universal necessities, and therefore people gen- 
erally would not buy them. Just how^ I reached that 
surprising conclusion I am unable to state. I did not like 
the ordinary jewellery and watchmaking work excepting 
where the job was hard to do. Even then I wanted to 
make something in quantity. It was just about the time 
when the standard railroad time was being arranged. We 
had formerly been on sun time and for quite a while, just 
as in our present daylight-saving days, the railroad time 
differed from the local time. That bothered me a good 
deal and so I succeeded in making a watch that kept both 
times. It had two dials and it was quite a curiosity in 
the neighbourhood. 

In 1879 — that is, about four years after I first saw that 
Nichols -Shepard machine — I managed to get a chance to 


run one and when my apprenticeship was over I worked 
with a local representative of the Westinghouse Company 
of Schenectady as an expert in the setting up and repair 
of their road engines. The engine they put out was much 
the same as the Nichols-Shepard engine excepting that 
the engine was up in front, the boiler in the rear, and the 
power was applied to the back wheels by a belt. They 
could make twelve miles an hour on the road even though 
the self-propelling feature was only an incident of the con- 
struction. They were sometimes used as tractors to pull 
heavy loads and, if the owner also happened to be in 
the threshing-machine business, he hitched his threshing 
machine and other paraphernalia to the engine in moving 
from farm to farm. What bothered me was the weight 
and the cost. They weighed a couple of tons and were 
far too expensive to be owned by other than a farmer with 
a great deal of land. They were mostly employed by 
people who went into threshing as a business or who had 
sawmills or some other line that required portable power. 
Even before that time I had the idea of making some 
kind of a light steam car that would take the place of 
horses — more especially, however, as a tractor to attend to 
the excessively hard labour of ploughing. It occurred to 
me, as I remember somewhat vaguely, that precisely the 
same idea might be applied to a carriage or a wagon on the 
road. A horseless carriage was a common idea. People 
had been talking about carriages without horses for many 
years back — in fact, ever since the steam engine was in- 
vented — but the idea of the carriage at first did not seem 
so practical to me as the idea of an engine to do the harder 
farm work, and of all the work on the farm ploughing was 
the hardest. Our roads were poor and we had not the 
habit of getting around. One of the most remarkable 
features of the automobile on the farm is the way that it 
has broadened the farmer's life. We simply took for 


granted that unless the errand were urgent we would not 
go to town, and I think we rarely made more than a trip 
a week. In bad weather we did not go even that often. 
Being a full-fledged machinist and with a very fair work- 
shop on the farm it was not difiicult for me to build a 
steam wagon or tractor. In the building of it came the 
:idea that perhaps it might be made for road use. 1 felt 
perfectly certain that horses, considering all the bother ot 
attending them and the expense of feeding, did not earn 
their keep. The obvious thing to do was to design and 
build a steam engine that would be light enough to run 
an ordinary wagon or to pull a plough. I thought it 
more important first to develop the tractor, lo litt\ 
farm drudgery off flesh and blood and lay it on steel and ; 
motors has been my most constant ambition. It was 
circumstances that took me first into the actual manu- 
facture of road cars. I found eventually that people 
were more interested in something that would travel on 
the road than in something that would do the work on the 
farms In fact, I doubt that the light farm tractor could 
have been introduced on the farm had not the farmer 
had his eyes opened slowly but surely by the automobile. 
But that is getting ahead of the story. I thought the 
farmer would be more interested in the tractor. 

I built a steam car that ran. It had a kerosene-heated 
boiler and it developed plenty of power and a neat 
-ontrol— which is so easy with a steam throttle. But the 
boiler was dangerous. To get the requisite power with- 
out too big and heavy a power plant reqmred that the 
engine work under high pressure; sitting on a high- 
pressure steam boiler is not altogether pleasant, lo 
make it even reasonably safe required an excess of weight 
that nullified the economy of the high pressure For two 
years I kept experimenting with various sorts of boilers 
the engine and control problems were simple enough- 


and then I definitely abandoned the whole idea of running 
a road vehicle by steam. I knew that in England they had 
what amounted to locomotives running on the roads 
hauling lines of trailers and also there was no diflSculty 
in designing a big steam tractor for use on a large farm. 
But ours were not then English roads; they would have 
stalled or racked to pieces the strongest and heaviest 
road tractor. And anyway the manufacturing of a big 
tractor which only a few wealthy farmers could buy did 
not seem to me worth while. 

But I did not give up the idea of a horseless carriage. 
The work with the Westinghouse representative only 
served to confirm the opinion I had formed that steam was 
not suitable for light vehicles. That is why I stayed only 
a year with that company. There was nothing more that 
the big steam tractors and engines could teach me and I 
did not want to waste time on something that would lead 
nowhere. A few years before — it was while I was an 
apprentice — ^I read in the World of Science, an English 
publication, of the "silent gas engine" which was then 
coming out in England. I think it was the Otto engine. 
It ran with illuminating gas, had a single large cylinder, 
and the power impulses being thus intermittent required 
an extremely heavy fly-wheel. As far as weight was 
concerned it gave nothing like the power per poimd of 
metal that a steam engine gave, and the use of illuminat- 
ing gas seemed to dismiss it as even a possibility for road 
use. It was interesting to me only as all machinery was 
interesting. I followed in the English and American 
magazines which we got in the shop the development of the 
engine and most particularly the hints of the possible 
replacement of the illuminating gas fuel by a gas formed 
by the vaporization of gasoline. The idea of gas engines 
was by no means new, but this was the first time that a 
really serious effort had been made to put them on the 


market. They were received with interest rather than 
enthusiasm and I do not recall any one who thought that 
the internal combustion engine could ever have more than 
a limited use. All the wise people demonstrated con- 
clusively that the engine could not compete with steam- 
They never thought that it might carve out a career for 
itself. That is the way with wise people — they are so 
wise and practical that they always know to a dot just 
why something cannot be done; they always know the 
limitations. That is why I never employ an expert in 
full bloom. If ever I wanted to kill opposition by unfair 
means I would endow the opposition with experts. They 
would have so much good advice that I could be sure 
they would do little work. 

The gas engine interested me and I followed its prog- 
ress, but only from curiosity, until about 1885 or 1886 
when, the steam engine being discarded as the mo- 
tive power for the carriage that I intended some day 
to build, I had to look around for another sort of motive 
power. In 1885 I repaired an Otto engine at the Eagle 
Iron Works in Detroit. No one in town knew anything 
about them. There was a rumour that I did and, although 
I had never before been in contact with one, I undertook 
j and carried through the job. That gave me a chance to 
■study the new engine at first hand and in 1887 I built one 
on the Otto four-cycle model just to see if I understood 
the principles. "Four cycle" means that the piston 
traverses the cylinder four times to get one power im- 
pulse. The first stroke draws in the gas, the second 
compresses it, the third is the explosion or power stroke, 
while the fourth stroke exhausts the waste gas. The Httle 
model worked well enough; it had a one-inch bore and a 
three-inch stroke, operated with gasoline, and while it did 
'not develop much power, it was slightly lighter in pro- 
portion than the engines being offered commercially. 


I gave it away later to a young man who wanted it for 
something or other and whose name I have forgotten; 
it was eventually destroyed. That was the beginning of 
the work with the internal cx)mbustion engine. 

I was then on the farm to which I had returned, more 
because I wanted to experiment than because I wanted to 
farm, and, now being an all-around machinist, I had a first- 
class workshop to replace the toy shop of earlier days. 
My father offered me forty acres of timber land, provided 
I gave up being a machinist. I agreed in a provisional 
way, for cutting the timber gave me a chance to get 
married. I fitted out a sawmill and a portable engine and 
started to cut out and saw up the timber on the tract. 
Some of the first of that lumber went into a cottage on 
my new farm and in it we began our married life. It was 
not a big house — thirty-one feet square and only a story 
and a half high — but it was a comfortable place. I 4dded 
to it my workshop, and when I was not cutting timber I was 
working on the gas engines — learning what they were and 
how they acted. I read everything I could find, but the 
greatest knowledge came from the work. A gas engine is 
a mysterious sort of thing — it will not always go the way 
it should. You can imagine how those first engines acted! 

It was in 1890 that I began on a double-cylinder engine. 
It was quite impractical to consider the single cylinder for 
transportation purposes — the fly-wheel had to be entirely 
too heavy. Between making the first four-cycle engine of 
the Otto type and the start on a double cylinder I had 
made a great many experimental engines out of tubing. 
I fairly knew my way about. The double cylinder I 
thought could be applied to a road vehicle and my original 
idea was to put it on a bicycle with a direct connection to the 
crankshaft and allowing for the rear wheel of the bicycle 
to act as the balance wheel. The speed was going to be 
varied only by the throttle. I never carried out this plan 


because it soon became apparent that the engine, gasoline 
tank, and the various necessary controls would be entirely 
too heavy for a bicycle. The plan of the two opposed 
cylinders was that, while one would be delivering power 
the other would be exhausting. This naturally would 
not require so heavy a fly-wheel to even the application 
of power. The work started in my shop on the farm. 
Then I was offered a job with the Detroit Electric Com- 
pany as an engineer and machinist at forty-five dollars a 
month. I took it because that was more money than the 
farm was bringing me and I had decided to get away from 
farm life anyway. The timber had all been cut. We 
rented a house on Bagley Avenue, Detroit. The workshop 
came along and I set it up in a brick shed at the back of 
the house. During the first several months I was in the 
night shift at the electric-light plant — which gave me very 
little time for experimenting — but after that I was in the 
day shift and every night and all of every Saturday night 
I worked on the new motor. I cannot say that it was 
hard work. No work with interest is ever hard. I 
always am certain of results. They always come if you 
work hard enough. But it was a very great thing to have 
my wife even more confident than I was. She has always 
been that way. 

I had to work from the ground up — ^that is, although 
I knew that a number of people were working on horseless 
carriages, I could not know what they were doing. The 
hardest problems to overcome were in the making and 
breaking of the spark and in the avoidance of excess 
weight. For the transmission, the steering gear, and the 
general construction, I could draw on my experience with 
the steam tractors. In 1892 I completed my first motor 
car, but it was not until the spring of the following year 
that it ran to my satisfaction. This first car had some- 
thing of the appearance of a buggy. There were two 


cylinders witb a two-and-a-half-inch bore and a six-inch 
stroke set side by side and over the rear axle. I made them 
out of the exhaust pipe of a steam engine that I had bought. 
They developed about four horsepower. The power was 
transmitted from the motor to the countershaft by a belt 
and from the countershaft to the rear wheel by a chain. 
The car would hold two people, the seat being suspended 
on posts and the body on elliptical springs. There were two 
speeds — one of ten and the other of twenty miles per hour — 
obtained by shifting the belt, which was done by a clutch 
lever in front of the driving seat. Thrown forward, the 
lever put in the high speed; thrown back, the low speed; 
with the lever upright the engine could run free. To start 
the car it was necessary to turn the motor over by hand 
with the clutch free. To stop the car one simply released 
the clutch and applied the foot brake. There was no 
reverse, and speeds other than those of the belt were 
obtained by the throttle. I bought the iron work for the 
frame of the carriage and also the seat and the springs. 
The wheels were twenty-eight-inch wire bicycle wheels 
with rubber tires. The balance wheel I had cast from a 
pattern that I made and all of the more delicate mecha- 
nism I made myself. One of the features that I discovered 
necessary was a compensating gear that permitted the 
same power to be applied to each of the rear wheels when 
turning corners. The machine altogether weighed about 
five hundred pounds. A tank under the seat held three 
gallons of gasoline which was fed to the motor through a 
small pipe and a mixing valve. The ignition was by 
electric spark. The original machine was air-cooled — 
or to be more accurate, the motor simply was not cooled 
at all. I found that on a run of an hour or more the motor 
heated up, and so I very shortly put a water jacket around 
the cylinders and piped it to a tank in the rear of the car 
over the cylinders. 


Nearly all of these various features had been planned in 
advance. That is the way I have always worked. I draw 
a plan and work out every detail on the plan before 
starting to build. For otherwise one will waste a great 
deal of time in makeshifts as the work goes on and the 
finished article will not have coherence. It will not be 
rightly proportioned. Many inventors fail because they 
do not distinguish between planning and experimenting. 
The largest building diflSculties that I had were in 
obtaining the proper materials. The next were with tools. 
There had to be some adjustments and changes in details 
of the design, but what held me up most was that I had 
neither the time nor the money to search for the best 
material for each part. But in the spring of 1893 the 
machine was running to my partial satisfaction and 
giving an opportunity further to test out the design and 
material on the road. 


What I Learned About Business 

MY "gasoline buggy" was the first and for a long 
time the only automobile in Detroit. It was 
considered to be something of a nuisance, for it 
made a racket and it scared horses. Also it blocked traffic. 
For if I stopped my machine anywhere in town a crowd 
was around it before I could start up again. If I left it 
alone even for a minute some inquisitive person always 
tried to run it. Finally, I had to carry a chain and chain it 
to a lamp post whenever I left it anywhere. And then 
there was trouble with the police. I do not know quite 
why, for my impression is that there were no speed-limit 
laws in those days. Anyway, I had to get a special permit 
from the mayor and thus for a time enjoyed the distinc- 
tion of being the only licensed chauffeur in America. I ran 
that machine about one thousand miles through 1895 and 
1896 and then sold it to Charles Ainsley of Detroit for two 
hundred dollars. That was my first sale. I had built the 
car not to sell but only to experiment with. I wanted to 
start another car. Ainsley wanted to buy. I could use 
the money and we had no trouble in agreeing upon a price. 
It was not at all my idea to make cars in any such petty 
fashion. I was looking ahead to production, but before 
that could come I had to have something to produce. It 
does not pay to hurry. I started a second car in 1896; 
it was much like the first but a little lighter. It also had 
the belt drive which I did not give up until some time 
later; the belts were all right excepting in hot weather. 
That is why I later adopted gears. I learned a great deal 



from that car. Others in this country and abroad were 
building cars by that time, and in 1895 I heard that a 
Benz car from Germany was on exhibition in Macy's 
store in New York. I travelled down to look at it but it 
had no features that seemed worth while. It also had the 
belt drive, but it was much heavier than my car. I was 
working for lightness; the foreign makers have never 
seemed to appreciate what light weight means. I built 
three cars in all in my home shop and all of them ran for 
years in Detroit. I still have the first car; I bought it 
back a few years later from a man to whom Mr. Ainsley 
had sold it. I paid one hundred dollars for it. 

During all this time I kept my position with the electric 
company and gradually advanced to chief engineer at a 
salary of one hundred and twenty-five dollars a month. 
But my gas-engine experiments were no more popular 
with the president of the company than my first me- 
chanical leanings were with my father. It was not that 
my employer objected to experiments — only to experi^ 
ments with a gas engine. I can still hear him say: 

"Electricity, yes, that's the coming thing. But gas — 

He had ample grounds for his skepticism — to use the 
mildest terms. Practically no one had the remotest 
notion of the future of the internal combustion engine, 
while we were just on the edge of the great electrical 
development. As with every comparatively new idea, 
electricity was expected to do much more than we even now 
have any indication that it can do. I did not see the use 
of experimenting with electricity for my purposes. A 
road car could not run on a trolley even if trolley wires had 
been less expensive; no storage battery was in sight of a 
weight that was practical. An electrical car had of 
necessity to be limited in radius and to contain a large 
amount of motive machinery in proportion to the power 


exerted. That is not to say that I held or now hold 
electricity cheaply; we have not yet begun to use electri- 
city. But it has its place, and the internal combustion 
engine has its place. Neither can substitute for the 
other — which is exceedingly fortunate. 

I have the dynamo that I first had charge of at the 
Detroit Edison Company. When I started our Canadian 
plant I bought it from an office building to which it had 
been sold by the electric company, had it revamped a 
Httle, and for several years it gave excellent service in the 
Canadian plant. When we had to build a new power 
plant, owing to the increase in business, I had the old 
motor taken out to my museum — a room out at Dearborn 
that holds a great number of my mechanical treasures. 

The Edison Company offered me the general superin- 
tendency of the company but only on condition that I 
would give up my gas engine and devote myself to some- 
thing really useful. I had to choose between my job and 
my automobile. I chose the automobile, or rather I gave 
up the job — there was really nothing in the way of a 
choice. For already I knew that the car was bound to be 
a success. I quit my job on August 15, 1899, and went 
into the automobile business. 

It might be thought something of a step, for I had no 
personal funds. WTiat money was left over from living 
was all used in experimenting. But my wife agreed that 
the automobile could not be given up — that we had to 
make or break. There was no "demand" for automobiles 
— there never is for a new article. They were accepted 
in much the fashion as was more recently the airplane. 
At first the "horseless carriage" was considered merely a 
freak notion and many wise people explained with par- 
ticularity why it could never be more than a toy. No man 
of money even thought of it as a commercial possibility. 
I cannot imagine why each new means of transportation 


meets with such opposition. There are even those to-day 
who shake their heads and talk about the luxury of the 
automobile and only grudgingly admit that perhaps the 
motor truck is of some use. But in the beginning there 
was hardly any one who sensed that the automobile could 
be a large factor in industry. The most optimistic hoped 
only for a development akin to that of the bicycle. 
WTien it was found that an automobile really could go 
and several makers started to put out cars, the immediate 
query was as to which would go fastest. It was a curious 
but natural development — that racing idea. I never 
thought anything of racing, but the public refused to 
consider the automobile in any light other than as a fast 
toy. Therefore later we had to race. The industry was 
held back by this initial racing slant, for the attention of 
the makers was diverted to making fast rather than good 
cars. It was a business for speculators. 

A group of men of speculative turn of mind organized, 
as soon as I left the electric company, the Detroit Auto- 
mobile Company to exploit my car. I was the chief 
engineer and held a small amount of the stock. For three 
years we continued making cars more or less on the model 
of my first car. We sold very few of them; I could get no 
support at all toward making better cars to be sold to the 
public at large. The whole thought was to make to 
order and to get the largest price possible for each car. 
The main idea seemed to be to get the money. And 
being without authority other than my engineering 
position gave me, I found that the new company was not 
a vehicle for realizing my ideas but merely a money- 
making concern — that did not make much money. In 
March, 1902, I resigned, determined never again to put 
myself under orders. The Detroit Automobile Company 
later became the Cadillac Company under the ownership 
of the lelaud.s, who came in subsequently. 


I rented a shop — a one-story brick shed — at 81 Park 
Place to continue my experiments and to find out what 
business really was. I thought that it must be something 
different from what it had proved to be in my first 

The year from 1902 until the formation of the Ford 
Motor Company was practically one of investigation. 
In my little one-room brick shop I worked on the develop- 
ment of a four-cylinder motor and on the outside I tried 
to find out what business really was and whether it 
needed to be quite so selfish a scramble for money as it 
seemed to be from my first short experience. From the 
period of the first car, which I have described, until the 
formation of my present company I built in all about 
twenty-five cars, of which nineteen or twenty were built 
with the Detroit Automobile Company. The automobile 
had passed from the initial stage where the fact that it 
could run at all was enough, to the stage where it had to 
show speed. Alexander Winton of Cleveland, the founder 
of the Winton car, was then the track champion of the 
country and willing to meet all comers. I designed 
a two-cylinder enclosed engine of a more compact type 
than I had before used, fitted it into a skeleton chassis, 
found that I could make speed, and arranged a race with 
Winton. We met on the Grosse Point track at Detroit. 
I beat him. That was my first race, and it brought 
advertising of the only kind that people cared to read. 

The public thought nothing of a car unless it made 
speed — unless it beat other racing cars. My ambition to 
build the fastest car in the world led me to plan a four- 
cylinder motor. But of that more later. 

The most surprising feature of business as it was 
conducted was the large attention given to finance and the 
small attention to service. That seemed to me to be 
reversing the natural process which is that the money^ 


should come as the result of work and not before the work. 
The second feature was the general indifiPerence to better 
methods of manufacture as long as whatever was done 
got by and took the money. In other words, an article 
apparently was not built with reference to how greatly it 
could serve the public but with reference solely to how much 
money could be had for it — and that without any particu- 
lar care whether the customer was satisfied. To sell him 
was enough. A dissatisfied customer was regarded not 
as a man whose trust had been violated, but either as a 
nuisance or as a possible source of more money in fixing 
up the work which ought to have been done correctly in 
the first place. For instance, in automobiles there was not 
much concern as to what happened to the car once it had 
been sold. How much gasoline it used per mile was of no 
great moment; how much service it actually gave did not 
matter; and if it broke down and had to have parts 
replaced, then that was just hard luck for the owner. It 
was considered good business to sell parts at the highest 
possible price on the theory that, since the man had already 
bought the car, he simply had to have the part and would 
be willing to pay for it. 

The automobile business was not on what I would call 
an honest basis, to say nothing of being, from a manu- 
facturing standpoint, on a scientific basis, but it was no 
worse than business in general. That was the period, 
it may be remembered, in which many corporations 
were being floated and financed. The bankers, who 
before then had confined themselves to the railroads, 
got into industry. My idea was then and still is that if a 
man did his work well, the price he would get for that 
work, the profits and all financial matters, would care 
for themselves and that a business ought to start small 
and build itself up and out of its earnings. If there are 
no earnings then that is a signal to the owner that he is 


wasting his time and does not belong in that business. 
I have never found it necessary to change those ideas, 
but I discovered that this simple formula of doing good 
work and getting paid for it was supposed to be slow for 
3Rodern business. The plan at that time most in favour 
vas to start off with the largest possible capitalization 
and then sell all the stock and all the bonds that could be 
sold. Whatever money happened to be left over after 
all the stock and bond-selling expenses and promoters, 
charges and all that, went grudgingly into the foundation 
of the business. A good business was not one that did 
good work and earned a fair profit. A good business was 
one that would give the opportunity for the floating of a 
large amount of stocks and bonds at high prices. It was 
the stocks and bonds, not the work, that mattered. 
I could not see how a new business or an old business could 
be expected to be able to charge into its product a great 
big bond interest and then sell the product at a fair price. 
I have never been able to see that. 

I have never been able to understand on what theory 
the original investment of money can be charged against 
a business. Those men in business who call themselves 
financiers say that money is "worth" 6 per cent, or 5 per 
cent, or some other per cent., and that if a business has one 
hundred thousand dollars invested in it, the man who 
made the investment is entitled to charge an interest 
payment on the money, because, if instead of putting that 
money into the business he had put it into a savings bank 
or into certain securities, he could have a certain fixed 
return. Therefore they say that a proper charge against 
the operating expenses of a business is the interest on 
this money. This idea is at the root of many business 
failures and most service failures. Money is not worth a 
particular amount. As money it is not worth anything, 
for it will do nothing of itseK. The only use of money is 


to buy tools to work with or the product of tools. TherC' 
fore money is worth what it will help you to produce or 
buy and no more. If a man thinks that his money will 
earn 5 per cent, or 6 per cent, he ought to place it where he 
can get that return, but money placed in a business is 
not a charge on the business — or, rather, should not be. 
It ceases to be money and becomes, or should become, an 
engine of production, and it is therefore worth what it 
produces — and not a fixed sum according to some scale 
that has no bearing upon the particular business in which 
the money has been placed. Any return should come 
after it has produced, not before. 

Business men believed that you could do anything b^ 
"financing" it. If it did not go through on the first 
financing then the idea was to "refinance." The process 
of "refinancing" was simply the game of sending good 
money after bad. In the majority of cases the need of 
refinancing arises from bad management, and the effect 
of refinancing is simply to pay the poor managers to 
keep up their bad management a little longer. It is 
merely a postponement of the day of judgment. This 
makeshift of refinancing is a device of speculative finan- 
ciers. Their money is no good to them unless they can 
connect it up with a place where real work is being done, 
and that they cannot do unless, somehow, that place is 
poorly managed. Thus, the speculative financiers delude 
themselves that they are putting their money out to use. 
They are not; they are putting it out to waste. 

I determined absolutely that never would I join a 
company in which finance came before the work or in 
which bankers or financiers had a part. And further that, 
if there were no way to get started in the kind of business 
that I thought could be managed in the interest of the 
public, then I simply would not get started at all. For 
my own short experience, together with what I saw going 


on around me, was quite enough proof that business as a 
mere money-making game was not worth giving much 
thought to and was distinctly no place for a man who 
wanted to accomplish anything. Also it did not seem 
to me to be the way to make money. I have yet to have 
it demonstrated that it is the way. For the only founda- 
tion of real business is service. 

A manufacturer is not through with his customer when 
a sale is completed. He has then only started with his 
customer. In the case of an automobile the sale of the 
machine is only something in the nature of an introduction. 
If the machine does not give service, then it is better for 
the manufacturer if he never had the introduction, for 
he will have the worst of all advertisements — a dissatisfied 
customer. There was something more than a tendency 
in the early days of the automobile to regard the selling 
of a machine as the real accomplishment and that there- 
after it did not matter what happened to the buyer, 
That is the shortsighted salesman-on-commission attitude. 
If a salesman is paid only for what he sells, it is not to be 
expected that he is going to exert any great effort on a 
customer out of whom no more commission is to be made. 
And it is right on this point that we later made the largest 
selling argument for the Ford. The price and the quality 
of the car would undoubtedly have made a market, and 
a large market. We went beyond that. A man who 
bought one of our cars was in my opinion entitled to 
continuous use of that car, and therefore if he had a 
breakdown of any kind it was our duty to see that his 
machine was put into shape again at the earliest possible 
moment. In the success of the Ford car the early 
provision of service was an outstanding element. Most 
of the expensive cars of that period were ill provided with 
service stations. If your car broke down you had to 
depend on the local repair man — when you were entitled 


to depend upon the manufacturer. If the local repair 
man were a forehanded sort of a person, keeping on hand 
a good stock of parts (although on many of the cars the 
parts were not interchangeable), the owner was lucky. 
But if the repair man were a shiftless person, with an 
inadequate knowled<]je of automobiles and an inordinate 
desire to make a good thing out of every car that came into 
his place for repairs, then even a slight breakdown meant 
weeks of laying up and a whopping big repair bill that had 
to be paid before the car could be taken away. The repair 
men were for a time the largest menace to the automobile 
industry. Even as late as 1910 and 1911 the owner of an 
automobile was regarded as essentially a rich man whose 
money ought to be taken away from him. We met that 
situation squarely and at the very beginning. We w^ould 
not have our distribution blocked by stupid, greedy men. 

That is getting some years ahead of the story, but it is 
control by finance that breaks up service because it looks 
to the immediate dollar. If the first consideration is to 
earn a certain amount of money, then, unless by some 
stroke of luck matters are going especially well and there 
is a surplus over for service so that the operating men may 
have a chance, future business has to be sacrificed for the 
dollar of to-day. 

And also I noticed a tendency among many men in 
business to feel that their lot was hard — ^they worked 
against a day when they might retire and live on an 
income — get out of the strife. Life to them was a battle 
to be ended as soon as possible. That was another point 
I could not understand, for as I reasoned, life is not a 
battle except with our own tendency to sag with the 
downpull of "getting settled." If to petrify is success, 
all one has to do is to humour the lazy side of the mind; 
but if to grow is success, then one must wake up anew 
every morning and keep awake all day. I saw great 


businesses become but the ghost of a name because some- 
one thought they could be managed just as they were 
always managed, and though the management may have 
been most excellent in its day, its excellence consisted 
in its alertness to its day, and not in slavish following of 
its yesterdays. Life, as I see it, is not a location, but 
a journey. Even the man who most feels himself "settled" 
is not settled — ^he is probably sagging back. Everything 
is in flux, and was meant to be. Life flows. We may 
live at the same number of the street, but it is never the 
same man who lives there. 

And out of the delusion that life is a battle that may 
be lost by a false move grows, I have noticed, a great love 
for regularity. Men fall into the half-ahve habit. 
Seldom does the cobbler take up with the new-fangled 
way of soling shoes, and seldom does the artisan willingly 
take up with new methods in his trade. Habit conduces 
to a certain inertia, and any disturbance of it affects the 
mind like trouble. It will be recalled that when a study 
was made of shop methods, so that the workmen might 
be taught to produce with less useless motion and fatigue, 
it was most opposed by the workmen themselves. 
Though they suspected that it was simply a game to get 
more out of them, what most irked them was that it 
interfered with the well-worn grooves in which they had 
become accustomed to move. Business men go down with 
their businesses because they like the old way so well they 
cannot bring themselves to change. One sees them all 
about — men who do not know that yesterday is past, 
and who woke up this morning with their last year's ideas. 
It could almost be written down as a formula that when 
a man begins to think that he has at last found his method 
he had better begin a most searching examination of 
himself to see whether some part of his brain has not gone 
to sleep. There is a subtle danger in a man thinking 


that he is "fixed'* for Hfe. It indicates that the next jolt 
of the wheel of progress is going to fling him off. 

There is also the great fear of being thought a fool. 
So many men are afraid of being considered fools. I 
grant that public opinion is a powerful police influence 
for those who need it. Perhaps it is true that the 
majority of men need the restraint of public opinion. 
Public opinion may keep a man better than he would 
otherwise be — if not better morally, at least better as 
far as his social desirability is concerned. But it is not 
a bad thing to be a fool for righteousness' sake. The best 
of it is that such fools usually live long enough to prove 
that they were not fools — or the work they have begun 
lives long enough to prove they were not foolish. 

The money influence — the pressing to make a profit on an 
"investment" — and its consequent neglect of or skimping 
of work and hence of service showed itself to me in many 
ways. It seemed to be at the bottom of most troubles. It 
was the cause of low wages — for without well-directed work 
high wages cannot be paid. And if the whole attention 
is not given to the work it cannot be well directed. Most 
men want to be free to work; imder the system in use they 
could not be free to work. During my first experience 
I was not free — ^I could not give full play to my ideas. 
Everji;hing had to be planned to make money; the last 
consideration was the work. And the most curious part 
of it all was the insistence that it was the money and not 
the work that counted. It did not seem to strike any one 
as illogical that money should be put ahead of work — 
even though everyone had to admit that the profit had to 
come from the work. The desire seemed to be to find 
a short cut to money and to pass over the obvious short 
cut — which is through the work. 

Take competition; I found that competition was sup- 
posed to be a menace and that a good manager circum- 



vented his competitors by getting a monopoly through 
artificial means. The idea was that there were only a 
certain number of people who could buy and that it was 
necessary to get their trade ahead of someone else. Some 
will remember that later many of the automobile manu- 
facturers entered into an association under the Selden 
Patent just so that it might be legally possible to control 
the price and the output of automobiles. They had the 
same idea that so many trades unions have — the ridicu- 
lous notion that more profit can be had doing less work 
than more. The plan, I believe, is a very antiquated one. 
I could not see then and am still unable to see that there 
is not always enough for the man who does his work; time 
spent in fighting competition is wasted; it had better 
be spent in doing the work. There are always enough 
people ready and anxious to buy, provided you supply 
what they want and at the proper price — and this applies 
to personal services as well as to goods. 

During this time of reflection I was far from idle. We 
were going ahead with a four-cylinder motor and the 
building of a pair of big racing cars. I had plenty of time, 
for I never left my business. I do not believe a man can 
ever leave his business. He ought to think of it by day 
and dream of it by night. It is nice to plan to do one's 
work in office hours, to take up the work in the morning, 
to drop it in the evening — and not have a care until the 
next morning. It is perfectly possible to do that if one 
is so constituted as to be willing through all of his life to 
accept direction, to be an employee, possibly a responsible 
employee, but not a director or manager of anything. A 
manual labourer must have a limit on his hours, otherwise 
he will wear himself out. If he intends to remain always a 
manual labourer, then he should forget about his work 
when the whistle blows, but if he intends to go forward and 
do anything, the whistle is only a signal to start think- 


ing over the day's work in order to discover how it might 
be done better. 

The man who has the largest capacity for work and 
thought is the man who is bound to succeed. I cannot 
pretend to say, because I do not know, whether the man 
who works always, who never leaves his business, who is 
absolutely intent upon getting ahead, and who therefore 
does get ahead— is happier than the man who keeps office 
hours, both for his brain and his hands. It is not necessary 
for any one to decide the question. A ten-horsepower 
engine will not pull as much as a twenty. The man who 
keeps brain office hours limits his horsepower. If he 
is satisfied to pull only the load that he has, well and good, 
that is his affair— but he must not complain if another 
who has increased his horsepower pulls more than he 
does. Leisure and work bring different results. If a 
man wants leisure and gets it— then he has no cause to 
complain. But he cannot have both leisure and the 
results of work. 

Concretely, what I most realized about business m that 
year— and I have been learning more each year without 
finding it necessary to change my first conclusions— is 

(1) That finance is given a place ahead of work and 
therefore tends to kill the work and destroy the funda- 
mental of service. - . 

(2) That thinking first of money instead of work brmgs 
on fear of failure and this fear blocks every avenue of 
business— it makes a man afraid of competition, of chang- 
ing his methods, or of doing anything which might change 
his condition. 

(3) That the way is clear for any one who thinks Iffst 
of service— of doing the work in the best possible way. 


Starting the Real Business 

iN THE little brick shop at 81 Park Place I had ample 
opportunity to work out the design and some of the 
methods of manufacture of a new car. Even if it 
were possible to organize the exact kind of corporation 
that I wanted — one in which doing the work well and suit- 
ing the public would be controlling factors — ^it became ap- 
parent that I never could produce a thoroughly good 
motor car that might be sold at a low price under the ex- 
isting cut-and-try manufacturing methods. 

Everybody knows that it is always possible to do a 
thing better the second time. I do not know why 
manufacturing should not at that time have generally 
recognized this as a basic fact — unless it might be that the 
manufacturers were in such a hurry to obtain something 
to sell that they did not take time for adequate preparation. 
Making *'to order" instead of making in volume is, 
I suppose, a habit, a tradition, that has descended from 
the old handicraft days. Ask a hundred people how they 
want a particular article made. About eighty will not 
know; they will leave it to you. Fifteen will think that 
they must say something, while five will really have 
preferences and reasons. The ninety-five, made up of 
those who do not know and admit it and the fifteen who 
do not know but do not admit it, constitute the real 
market for any product. The five who want something 
special may or may not be able to pay the price for special 
work. If they have the price, they can get the work, 
but they constitute a special and limited market. Of the 



ninety-five perhaps ten or fifteen will pay a price for 
quality. Of those remaining, a number will buy solely 
on price and wathout regard to quality. Their numbers 
are thinning with each day. Buyers are learning how to 
buy. The majority will consider quality and buy the 
biggest dollar's worth of quality. If, therefore, you 
discover what will give this 95 per cent, of people the 
best all-round service and then arrange to manufacture at 
the very highest quality and sell at the very lowest price, 
you will be meeting a demand which is so large that it 
may be called universal. 

This is not standardizing. The use of the word 
"standardizing" is very apt to lead one into trouble, for 
it implies a certain freezing of design and method and usu- 
ally works out so that the manufacturer selects whatever 
article he can the most easily make and sell at the highest 
profit. The public is not considered either in the design 
or in the price. The thought behind most standardization 
is to be able to make a larger profit. The result is that 
with the economies which are inevitable if you make only 
one thing, a larger and larger profit is continually being had 
by the manufacturer. His output also becomes larger — 
his facilities produce more — and before he knows it his 
markets are overflowing with goods which will not sell. 
These goods would sell if the manufacturer would take a 
lower price for them. There is always buying power 
present — but that buying power will not always respond 
to reductions in price. If an article has been sold at too 
high a price and then, because of stagnant business, the 
price is suddenly cut, the response is sometimes most 
disappointing. And for a very good reason. The public 
is wary. It thinks that the price-cut is a fake and it sits 
around waiting for a real cut. We saw much of that last 
year. If, on the contrary, the economies of making are 
transferred at once to the price and if it is well known that 


such is the poHcy of the manufacturer, the public will 
have confidence in him and will respond. They will trust 
him to give honest value. So standardization may seem 
bad business unless it carries with it the plan of constantly 
reducing the price at which the article is sold. And the 
price has to be reduced (this is very important) because of 
the manufacturing economies that have come about and 
not because the falling demand by the public indicates 
that it is not satisfied with the price. The public should 
always be wondering how it is possible to give so much for 
the money. 

Standardization (to use the word as I understand it) 
is not just taking one's best selling article and concentrat- 
ing on it. It is planning day and night and probably for 
years, first on something which will best suit the public 
and then on how it should be made. The exact processes 
of manufacturing will develop of themselves. Then, if 
we shift the manufacturing from the profit to the service 
basis, we shall have a real business in which the profits will 
be all that any one could desire. 

All of this seems self-evident to me. It is the logical 
basis of any business that wants to serve 95 per 
cent, of the community. It is the logical way in which 
the community can serve itself. I cannot comprehend 
why all business does not go on this basis. All that has 
to be done in order to adopt it is to overcome the habit 
of grabbing at the nearest dollar as though it were the 
only dollar in the world. The habit has already to an 
extent been overcome. All the large and successful retail 
stores in this country are on the one-price basis. The only 
further step required is to throw overboard the idea of 
pricing on what the traffic will bear and instead go to the 
conunon-sense basis of pricing on what it costs to manu- 
facture and then reducing the cost of manufacture. If the 
design of the product has been sufficiently studied, then 


ehanges in it will come very slowly. But changes in 
manufacturing processes will come very rapidly and wholly 
naturally. That has been our experience in everything 
we have undertaken. How naturally it has all come 
about, I shall later outline. The point that I wish to im- 
press here is that it is impossible to get a product on which 
one may concentrate unless an unlimited amount of study 
is given beforehand. It is not just an afternoon's work. 

These ideas were forming with me during this year of 
experimenting. Most of the experimenting went into 
the building of racing cars. The idea in those days was 
that a first-class car ought to be a racer. I never really 
thought much of racing, but following the bicycle idea, 
the manufacturers had the notion that winning a race on a 
track told the public something about the merits of an 
automobile — although I can hardly imagine any test that 
would tell less. 

But, as the others were doing it, I, too, had to do it. 
In 1903, with Tom Cooper, I built two cars solely for speed. 
They were quite alike. One we named the "999" and 
the other the "Arrow." If an automobile were going 
to be known for speed, then I was going to make an auto- 
mobile that would be known wherever speed was known. 
These were. I put in four great big cyhnders giving 
80 H.P. — which up to that time had been unheard of. 
The roar of those cylinders alone was enough to half kill 
a man. There was only one seat. One life to a car was 
enough. I tried out the cars. Cooper tried out the cars. 
We let them out at full speed. I cannot quite describe the 
sensation. Going over Niagara Falls would have been 
but a pastime after a ride in one of them. I did not want 
to take the responsibility of racing the " 999 " which we put 
up first, neither did Cooper. Cooper said he knew a man 
who lived on speed, that nothing could go too fast for him. 
He mred to Salt Lake City and on came a professional 


bicycle rider named Barney Oldfield. He had never 
driven a motor car, but he liked the idea of trying it. 
He said he would try anything once. 

It took us only a week to teach him how to drive. The 
man did not know what fear was. All that he had to 
learn was how to control the monster. Controlling the 
fastest car of to-day was nothing as compared to controlling 
that car. The steering wheel had not yet been thought of. 
All the previous cars that I had built simply had tillers. 
On this one I put a two-handed tiller, for holding the car 
in Hne required all the strength of a strong man. The race 
for which we were working was at three miles on the 
Grosse Point track. We kept our cars as a dark horse. 
We left the predictions to the others. The tracks then 
were not scientifically banked. It was not known how 
much speed a motor car could develop. No one knew 
better than Oldfield what the turns meant and as he took 
his seat, while I was cranking the car for the start, he 
remarked cheerily: "Well, this chariot may kill me, but 
they will say afterward that I was going like hell when 
she took me over the bank. " 

And he did go : He never dared 

to look around. He did not shut off on the curves. 
He simply let that car go — and go it did. He was about 
half a mile ahead of the next man at the end of the race ! 

The "999" did what it was intended to do: It ad- 
vertised the fact that I could build a fast motorcar. 
A week after the race I formed the Ford Motor Company. 
I was vice-president, designer, master mechanic, superin- 
tendent, and general manager. The capitalization of the 
company was one hundred thousand dollars, and of this I 
owned 25 J per cent. The total amount subscribed in cash 
was about twenty-eight thousand dollars — which is the 
only money that the company has ever received for the 
capital fund from other than operations. In the begin- 


ing I thought that it was possible, notwithstanding my 
former experience, to go forward with a company in which 
I owned less than the controlling share. I very shortly 
found I had to have control and therefore in 1906, with 
funds that I had earned in the company, I bought enough 
stock to bring my holdings up to 51 per cent, and a little 
later bought enough more to give me 5S}/^ per cent. 
The new equipment and the whole progress of the company 
have always been financed out of earnings. In 1919 my 
son Edsel purchased the remaining 41| per cent of the stock 
because certain of the minority stockholders disagreed 
with my policies. For these shares he paid at the rate 
of $12,500 for each $100 par and in all paid about seventy- 
five millions. 

The original company and its equipment, as may be 
gathered, were not elaborate. We rented Strelow's car- 
penter shop on Mack Avenue. In making my designs 
I had also worked out the methods of making, but, since 
at that time we could not afford to buy machinery, the 
entire car was made according to my designs, but by 
various manufacturers, and about all we did, even in the 
way of assembling, was to put on the wheels, the tires, and 
the body. That would really be the most economical 
method of manufacturing if only one could be certain that 
all of the various parts would be made on the manufactur- 
ing plan that I have above outlined. The most economical 
manufacturing of the future will be that in which the 
whole of an article is not made under one roof — unless, of 
course, it be a very simple article. The modern — or 
better, the future — method is to have each part made where 
it may best be made and then assemble the parts into a 
complete unit at the points of consumption. That is the 
method we are now following and expect to extend.' 
It would make no difference whether one company or one 
individual owned all the factories fabricating the com- 


ponent parts of a single product, or whether such part were 
made in our independently owned factory, ij only all 
adopted the same service methods. If we can buy as good 
a part as we can make ourselves and the supply is ample 
and the price right, we do not attempt to make it ourselves 
— or, at any rate, to make more than an emergency supply. 
In fact, it might be better to have the ownership widely 

I had been experimenting principally upon the cutting 
down of weight. Excess weight kills any self-propelled 
vehicle. There are a lot of fool ideas about weight. 
It is queer, when you come to think of it, how some fool 
terms get into current use. There is the phrase "heavy- 
weight" as applied to a man's mental apparatus! What 
does it mean.f^ No one wants to be fat and heavy of body 
— then why of head.? For some clumsy reason we have 
come to confuse strength with weight. The crude methods 
of early building undoubtedly had much to do with this. 
The old ox-cart weighed a ton — and it had so much 
weight that it was weak! To carry a few tons of hu- 
manity from New York to Chicago, the railroad builds 
a train that weighs many hundred tons, and the result 
is an absolute loss of real strength and the extrava- 
gant waste of untold millions in the form of power. 
The law of diminishing returns begins to operate at the 
point where strength becomes weight. Weight may be 
desirable in a steam roller but nowhere else. Strength 
has nothing to do with weight. The mentality of the 
man who does things in the world is agile, light, and 
strong. The most beautiful things in the world are 
those from which all excess weight has been eliminated. 
Strength is never just weight — either in men or things. 
Whenever any one suggests to me that I might increase 
weight or add a part, I look into decreasing weight and 
eliminating a part.' The car that I designed was lighter 


than any car tliat had yet been made. It would have 
been Hghter if I had known how to make it so — later I 
got tlie materials to make the lighter car. 

In our first year we built "Model A," selling the 
runabout for eight hundred and fifty dollars and the 
tonneau for one hundred dollars more. This model had a 
two-cylinder opposed motor developing eight horsepower. 
It had a chain drive, a seventy-two inch wheel base — 
which was supposed to be long — and a fuel capacity of 
five gallons. We made and sold 1,708 cars in the first 
year. That is how well the public responded. 

Every one of these "Model A's" has a history. Take 
No. 420. Colonel D. C. Collier of California bought it in 
1904. He used it for a couple of years, sold it, and bought 
a new Ford. No. 420 changed hands frequently until 1907 
when it was bought by one Edmund Jacobs living near 
Ramona in the heart of the mountains. He drove it for 
several years in the roughest kind of work. Then he 
bought a new Ford and sold his old one. By 1915 No.420 
had passed into the hands of a man named Cantello who 
took out the motor, hitched it to a water pump, rigged up 
shafts on the chassis and now, while the motor chugs away 
at the pumping of water, the chassis drawn by a burro acts 
as a buggy. The moral, of course, is that you can dissect a 
Ford but you cannot kill it. 

In our first advertisement we said: 

Our purpose is to construct and market an automobile specially 
designed for everyday wear and tear — business, professional, and 
family use; an automobile which will attain to a suflBcient speed to 
satisfy the average person without acquiring any of those breakneck 
velocities which are so universally condemned; a machine which will 
be admired by man, woman, and child alike for its compactness, its 
simplicity, its safety, its all-around convenience, and — last but not 
least — its exceedingly reasonable price, which places it within the 
reach of many thousands who could not think of paying the com- 
paratively fabulous prices asked for most machines. 


And these are the points we emphasized: 

Good material. 

Simplicity — ^most of the cars at that time required con- 
siderable skill in their management. 

The engine. 

The ignition — ^which was furnished by two sets of six 
dry cell batteries. 

The automatic oiling. 

The simplicity and the ease of control of the trans- 
mission, which was of the planetary type. 

The workmanship. 

We did not make the pleasure appeal. We never have. 
In its first advertising we showed that a motor car was a 
utility. We said: 

We often hear quoted the old proverb, "Time is money" — and yet 
tow few business and professional men act as if they really believed its 

Men who are constantly complaining of shortage of time and la^ 
menting the fewness of days in the week — men to whom every five 
minutes wasted means a dollar thrown away — men to whom five 
minutes' delay sometimes means the loss of many dollars — ^will yet 
depend on the haphazard, uncomfortable, and limited means of trans- 
portation afforded by street cars, etc., when the investment of an 
exceedingly moderate sum in the purchase of a perfected, efficient, 
high-grade automobile would cut out anxiety and unpunctuality and 
provide a luxurious means of travel ever at your beck and call. 

Always ready, always sure. 

Built to save you time and consequent money. 

Built to take you anywhere you want to go and bring you back 
again on time. 

Built to add to your reputation for punctuality; to keep your 
customers good-humoured and in a buying mood. 

Built for business or pleasure — ^just as you say. 

Built also for the good of your health — to carry you "jarlessly" 
over any kind of half decent roads, to refresh your brain with the 
luxury of much "out-doorness" and your lungs with the "tonic of 
tonics " — the right kind of atmosphere. 

It is your say, too, when it comes to speed. You can — if you 
choose — loiter lingeringly through shady avenues or you can press 


down on the foot-lever until all the scenery looks alike to you and you 
liave to keep your eyes skinned to count the milestones as they pass. 

I am giving the gist of this advertisement to show that, 
from the beginning, we were looking to providing service— 
we never bothered with a "sporting car. " 

The business went along almost as by magic. The 
cars gained a reputation for standing up. They were 
tough, they were simple, and they were well made. I 
was working on my design for a universal single model 
but I had not settled the designs nor had we the money 
to build and equip the proper kind of plant for manu- 
facturing. I had not the money to discover the very best 
and lightest materials. We still had to accept the mate- 
rials that the market offered — we got the best to be had 
but we had no facilities for the scientific investigation of 
materials or for original research. 

My associates were not convinced that it was possible 
to restrict our cars to a single model. The automobile 
trade was following the old bicycle trade, in which every 
manufacturer thought it necessary to bring out a new 
model each year and to make it so unlike all previous 
models that those who had bought the former models 
would want to get rid of the old and buy the new. That ' 
was supposed to be good business. It is the same idea 
that women submit to in their clothing and hats. That 
is not service — it seeks only to provide something new, 
not something better. It is extraordinary how firmly 
rooted is the notion that business — continuous selling — 
depends not on satisfying the customer once and for all, 
but on first getting his money for one article and then 
persuading him he ought to buy a new and different one. 
The plan which I then had in the back of my head but 
to which we were not then sufficiently advanced to 
give expression, was that, when a model was settled upon 


then every improvement on that model should be inter- 
changeable with the old model, so that a car should never 
get out of date. It is my ambition to have every piece of 
machinery, or other non-consumable product that I 
turn out, so strong and so well made that no one ought 
ever to have to buy a second one. A good machine of any 
kind ought to last as long as a good watch. 

In the second year we scattered our energies among 
three models. We made a four-cylinder touring car, 
"Model B," which sold for two thousand dollars; "Model 
C," which was a slightly improved "Model A" and sold 
at fifty dollars more than the former price; and "Model 
F, " a touring car which sold for a thousand dollars. 
That is, we scattered our energy and increased prices — 
and therefore we sold fewer cars than in the first year. 
The sales were 1,695 cars. 

That "Model B" — the first four-cylinder car for general 
road use — ^had to be advertised. Winning a race or 
making a record was then the best kind of advertising. 
So I fixed up the "Arrow," the twin of the old "999"— 
in fact practically remade it — and a week before the New 
York Automobile show I drove it myself over a surveyed 
mile straightaway on the ice. I shall never forget that 
race. The ice seemed smooth enough, so smooth that if 
I had called off the trial we should have secured an 
immense amount of the wrong kind of advertising, but 
instead of being smooth, that ice was seamed with fissures 
which I knew were going to mean trouble the moment I 
got up speed. But there was nothing to do but go through 
with the trial, and I let the old "Arrow" out. At every 
fissure the car leaped into the air. I never knew how it 
was coming down. When I wasn't in the air, I was 
skidding, but somehow I stayed top side up and on the 
course, making a record that went all over the world! 
That put "Model B" on the map — but not enough on 


to overcome the price advances. No stunt and no adver- 
tising will sell an article for any length of time. Business 
is not a game. The moral is coming. 

Our little wooden shop had, with the business we were 
doing, become totally inadequate, and in 1906 we took out 
of our working capital sufficient funds to build a three-story 
plant at the corner of Piquette and Beaubien streets — 
which for the first time gave us real manufactur- 
ing facilities. We began to make and to assemble quite 
a number of the parts, although still we were principally 
an assembling shop. In 1905-1906 we made only two 
models — one the four-cylinder car at $2,000 and another 
touring car at $1,000, both being the models of the pre- 
vious year — and our sales dropped to 1,599 cars. 

Some said it was because we had not brought out new 
models. I thought it was because our cars were too 
expensive — they did not appeal to the 95 per cent. I 
changed the policy in the next year — having first acquired 
stock control. For 1906-1907 we entirely left off making 
touring cars and made three models of runabouts and 
roadsters, none of which differed materially from the 
other in manufacturing process or in component parts, 
but were somewhat different in appearance. The big 
thing was that the cheapest car sold for $600 and the most 
expensive for only $750, and right there came the complete 
demonstration of what price meant. We sold 8,423 cars — ■ 
nearly five times as many as in our biggest previous year. 
Our banner week was that of May 15, 1908, when we 
assembled 311 cars in six working days. It almost 
swamped our facilities. The foreman had a tallyboard on 
which he chalked up each car as it was finished and turned 
over to the testers. The tallyboard was hardly equal to 
the task. On one day in the following June we assembled 
an even one hundred cars. 

lu the next year we departed from the programme 


that had been so successful and I designed a big cai' — • 
jfifty horsepower, six cylinder — that would burn up the 
roads. We continued making our small cars, but the 1907 
panic and the diversion to the more expensive model cut 
down the sales to 6,398 cars. 

We had been through an experimenting period of five 
years. The cars were beginning to be sold in Europe. 
The business, as "an automobile business then wqnt, was 
considered extraordinarily prosperous. We had plenty of 
money. Since the first year we have practically always 
had plenty of money. We sold for cash, we did not borrow 
money, and we sold directly to the purchaser. We had 
no bad debts and we kept within ourselves on every move. 
I have always kept well within my resources. I have 
never found it necessary to strain them, because, inevi- 
tably, if you give attention to work and service, the re- 
sources will increase more rapidly than you can devise 
ways and means of disposing of them. 

W^e were careful in the selection of our salesmen. At 
first there was great difficulty in getting good salesmen 
because the automobile trade was not supposed to be 
stable. It was supposed to be dealing in a luxury — ^io 
pleasure vehicles. We eventually appointed agents, SC' 
lecting the very best men we could find, and then paying 
to them a salary larger than they could possibly earn in 
business for themselves. In the beginning we had not 
paid much in the way of salaries. We were feeling our 
way, but when we knew what our way was, we adopted 
the policy of paying the very highest reward for service and 
then insisting upon getting the highest service. Among 
the requirements for an agent we laid down the following: 

(1) A progressive, up-to-date man keenly alive to the 
possibilities of business. 

(2) A suitable place of business clean and dignified in 


(3) A stock of parts sufficient to make prompt re- 
placements and keep in active service every Ford car in 
his territory. 

(4) An adequately equipped repair shop which has in 
it the right machinery for every necessary repair and 

(5) Mechanics who are thoroughly familiar with the 
construction and operation of Ford cars. 

(6) A comprehensive bookkeeping system and a follow- 
up sales system, so that it may be instantly apparent 
what is the financial status of the various departments of 
iiis business, the condition and size of his stock, the pres- 
ent owners of cars, and the future prospects. 

(7) Absolute cleanliness throughout every department. 
There must be no unwashed windows, dusty furniture, 
dirty floors. 

(8) A suitable display sign. 

(9) The adoption of policies which will ensure abso- 
lutely square dealing and the highest character of business 

And this is the general instruction that was issued: 

A dealer or a salesman ought to have the name of every possible 
automobile buyer in his territory, including all those who have never 
given the matter a thought. He should then personally solicit by 
visitation if possible — by correspondence at the least — every man 
on that hst and then making necessary memoranda, know the auto^ 
mobile situation as related to every resident so solicited. If your 
territory is too large to permit this, you have too much territory. 

' The way was not easy. We were harried by a big suit 
brought against the company to try to force us into line 
with an association of automobile manufacturers, who were 
operating under the false principle that there was only a 
limited market for automobiles and that a monopoly of 
that market was essential. This was the famous Selden 
Patent suit. At times the support of our defense severely 


strained our resources. Mr. Selden, who has but recently 
died, had Httle to do with the suit. It was the association 
which sought a monopoly under the patent. The situation 
was this: 

George B. Selden, a patent attorney, filed an applica- 
tion as far back as 1879 for a patent the object of which 
was stated to be "The production of a safe, simple, and 
cheap road locomotive, light in weight, easy to control, 
possessed of sufficient power to overcome an ordinary 
inclination." This application was kept alive in the 
Patent Office, by methods which are perfectly legal, imtil 
1895, when the patent was granted. In 1879, when the 
application was filed, the automobile was practically 
unknown to the general public, but by the time the 
patent was issued everybody was familiar with self- 
propelled vehicles, and most of the men, including myself, 
who had been for years working on motor propulsion, 
were surprised to learn that what we had made practicable 
was covered by an application of years before, although 
the applicant had kept his idea merely as an idea. He 
had done nothing to put it into practice. 

The specific claims under the patent were divided into 
six groups and I think that not a single one of them was a 
really new idea even in 1879 when the application was 
filed. The Patent Office allowed a combination and 
issued a so-called "combination patent" deciding that the 
combination (a) of a carriage with its body machinery and 
steering wheel, with the (b) propelling mechanism clutch 
and gear, and finally (c) the engine, made a valid patent. 
' With all of that we were not concerned. I believed 
that my engine had nothing whatsoever in common with 
what Selden had in mind. The powerful combination of 
manufacturers who called themselves the "licensed 
manufacturers" because they operated under licenses from 
the patentee, brought suit against us as soon as we began to 


be a factor in motor production. The suit dragged on. 
It was intended to scare us out of business. We took 
volumes of testimony, and the blow came on September 15, 
1909, when Judge Hough rendered an opinion in the 
United States District Court finding against us. Imme- 
diately that Licensed Association began to advertise, 
warning prospective purchasers against our cars. They 
had done the same thing in 1903 at the start of the suit, 
when it was thought that we could be put out of business. 
I had implicit confidence that eventually we should win 
our suit. I simply knew that we were right, but it was a 
considerable blow to get the first decision against us, 
for we believed that many buyers — even though no 
injunction was issued against us — would be frightened 
away from buying because of the threats of court action 
against individual owners. The idea was spread that if 
the suit finally went against me, every man who owned 
a Ford car would be prosecuted. Some of my more 
enthusiastic opponents, I understand, gave it out privately 
that there would be criminal as well as civil suits and 
that a man buying a Ford car might as well be buying a 
ticket to jail. We answered with an advertisement for 
which we took four pages in the principal newspapers all 
over the country. We set out our case — we set out our 
confidence in victory — and in conclusion said: 

In conclusion we beg to state if there are any prospective auto- 
mobile buyers who are at all intimidated by the claims made by our 
adversaries that we will give them, in addition to the protection ot 
the Ford Motor Company with its some $6,000,000.00 of assets, an 
individual bond backed by a Company of more than $6,000,000.00 
more of assets, so that each and every individual owner of a Ford 
car will be protected until at least $12,000,000.00 of assets have 
been wiped out by those who desire to control and monopohze this 
wonderful industry. 

The bond is yours for the asking, so do not allow yourself to be 
sold inferior cars at extravagant prices because of any statement 
made by this "Divine" body. 


N. B. — ^This jBght is not being waged by the Ford Motor Company 
without the advice and counsel of the ablest patent attorneys of the 
East and West. 

We thought that the bond would give assurance to the 
buyers — that they needed confidence. They did not. 
We sold more than eighteen thousand cars — nearly double 
the output of the previous year — and I think about fifty 
buyers asked for bonds — ^perhaps it was less than that. 

As a matter of fact, probably nothing so well advertised 
the Ford car and the Ford Motor Company as did this suit. 
It appeared that we were the under dog and we had the 
public's sympathy. The association had seventy million 
dollars — we at the beginning had not half that number of 
thousands. I never had a doubt as to the outcome, but 
nevertheless it was a sword hanging over our heads that 
we could as well do without. Prosecuting that suit was 
probably one of the most shortsighted acts that any group 
of American business men has ever combined to commit. 
Taken in all its sidelights, it forms the best possible 
example of joining unwittingly to kill a trade. I regard 
it as most fortunate for the automobile makers of the 
country that we eventually won, and the association 
ceased to be a serious factor in the business. By 1908, 
however, in spite of this suit, we had come to a point where 
it was possible to announce and put into fabrication the 
kind of car that I wanted to build. 


The Secret of Manufacturing and Serving 

NOW I am not outlining the career of the Ford 
Motor Company for any personal reason. I am 
not saying: "Go thou and do likewise.'* What 
I am trying to emphasize is that the ordinary way of 
doing business is not the best way. I am coming to the 
point of my entire departure from the ordinary methods. 
From this point dates the extraordinary success of the 

We had been fairly following the custom of the trade. 
Our automobile was less complex than any other. We had 
no outside money in the concern. But aside from these 
two points we did not differ materially from the other 
automobile companies, excepting that we had been 
somewhat more successful and had rigidly pursued the 
policy of taking all cash discounts, putting our profits 
back into the business, and maintaining a large cash 
balance. We entered cars in all of the races. We 
advertised and we pushed our sales. Outside of the 
simplicity of the construction of the car, our main differ- 
ence in design was that we made no provision for the 
purely "pleasure car. " We were just as much a pleasure 
car as any other car on the market, but we gave no atten- 
tion to purely luxury features. We would do special 
work for a buyer, and I suppose that we would have made 
a special car at a price. We were a prosperous company. 
We might easily have sat down and said: "Now we have 
arrived. Let us hold what we have got. '* 

Indeed, there was some disposition to take this stand. 



Some of the stockholders were seriously alarmed when 
our production reached one hundred cars a day. They 
wanted to do something to stop me from ruining the 
company, and when I replied to the effect that one hundred 
cars a day was only a trifle and that I hoped before long 
to make a thousand a day, they were inexpressibly 
shocked and I understand seriously contemplated court 
action. If I had followed the general opinion of my associ- 
ates I should have kept the business about as it was, put our 
funds into a fine administration building, tried to make 
bargains with such competitors as seemed too active, made 
new designs from time to time to catch the fancy of the 
public, and generally have passed on into the position of a 
quiet, respectable citizen with a quiet, respectable business. 

The temptation to stop and hang on to what one has is 
quite natural. I can entirely sympathize with the desire 
to quit a life of activity and retire to a life of ease. I have 
never felt the urge myself but I can comprehend what it is 
— although I think that a man who retires ought entirely 
to get out of a business. There is a disposition to retire 
and retain control. It was, however, no part of my plan 
to do anything of that sort. I regarded our progress 
merely as an invitation to do more — as an indication that 
we had reached a place where we might begin to perform 
a real service. I had been planning every day through 
these years toward a universal car. The public had given 
its reactions to the various models. The cars in service, 
the racing, and the road tests gave excellent guides as to 
the changes that ought to be made, and even by 1905 I 
had fairly in mind the specifications of the kind of car I 
wanted to build. But I lacked the material to give 
strength without weight. I came across that material 
almost by accident. 

In 1905 I was at a motor race at Palm Beach. There 
was a big smash-up and a French car was wrecked. We 


had entered our "Model K" — the high-powered six. 
I thought the foreign cars had smaller and better parts 
than we knew anything about. After the wreck I picked 
up a little valve strip stem. It was very light and very 
strong. I asked what it was made of. Nobody knew. 
I gave the stem to my assistant. 

"Find out all about this," I told him. "That is the 
kind of material we ought to have in our cars. " 

He found eventually that it was a French steel and that 
there was vanadium in it. We tried every steel maker in 
America — not one could make vanadium steel. I sent to 
England for a man who understood how to make the steel 
commercially. The next thing was to get a plant to turn 
at out. That was another problem. Vanadium requires 
3,000 degrees Fahrenheit. The ordinary furnace could 
not go beyond 2,700 degrees. I found a small steel 
company in Canton, Ohio. I offered to guarantee them 
against loss if they would run a heat for us. They agreed. 
The first heat was a failure. Very litle vanadium 
remained in the steel. I had them try again, and the 
second time the steel came through. Until then we had 
been forced to be satisfied with steel running between 
60,000 and 70,000 pounds tensile strength. With vanad- 
ium, the strength went up to 170,000 pounds. 

Having vanadium in hand I pulled apart our models 
and tested in detail to determine what kind of steel was 
best for every part — ^whether we wanted a hard steel, a 
tough steel, or an elastic steel. We, for the first time I 
think, in the history of any large construction, determined 
scientifically the exact quahty of the steel. As a result 
we then selected twenty different types of steel for the 
various steel parts. About ten of these were vanadium. 
Vanadium was used wherever strength and lightness were 
required. Of course they are not all the same kind of 
vanadium steeL The other elements vary according to 


whether the part is to stand hard wear or whether it needs 
spring — in short, according to what it needs. Before 
these experiments I beheve that not more than four 
different grades of steel had ever been used in automobile 
construction. By further experimenting, especially in the 
direction of heat treating, we have been able still further 
to increase the strength of the steel and therefore to 
reduce the weight of the car. In 1910 the French Depart- 
ment of Commerce and Industry took one of our steering 
spindle connecting rod yokes — selecting it as a vital unit — 
and tried it against a similar part from what they con- 
sidered the best French car, and in every test our steel 
proved the stronger. 

The vanadium steel disposed of much of the weight. 
The other requisites of a universal car I had already 
worked out and many of them were in practice. The de- 
sign had to balance. Men die because a part gives out. 
Machines wreck themselves because some parts are weaker 
than others. Therefore, a part of the problem in design- 
ing a universal car was to have as nearly as possible all 
parts of equal strength considering their purpose — to put a 
motor in a one-horse shay. Also it had to be fool proof. 
This was difficult because a gasoline motor is essentially 
a delicate instrument and there is a wonderful opportunity 
for any one who has a mind that way to mess it up. I 
adopted this slogan: 

"When one of my cars breaks down I know I am to 

From the day the first motor car appeared on the 
streets it had to me appeared to be a necessity. It was 
this knowledge and assurance that led me to build to the 
one end — a car that would meet the wants of the mul- 
titudes. All my efforts were then and still are turned to 
the production of one car — one model. And, year follow- 
ing year, the pressure was, and still is, to improve and 


refine and make better, with an increasing reduction 
in price. The universal car had to have these attri- 

(1) QuaHty in material to give service in use. Vanad- 
ium steel is the strongest, toughest, and most lasting of 
steels. It forms the foundation and super-structure of 
the cars. It is the highest quality steel in this respect in 
the world, regardless of price. 

(2) Simplicity in operation — because the masses are 
not mechanics. 

(3) Power in suflScient quantity. 

(4) Absolute reliability — because of the varied uses to 
which the cars would be put and the variety of roads over 
which they would travel. 

(5) Lightness. With the Ford there are only 7.95 
pounds to be carried by each cubic inch of piston dis- 
placement. This is one of the reasons why Ford cars are 
'* always going," wherever and whenever you see them — 
through sand and mud, through slush, snow, and water, 
up hills, across fields and roadless plains. 

(6) Control — ^to hold its speed always in hand, calmly 
and safely meeting every emergency and contingency either 
in the crowded streets of the city or on dangerous roads. 
The planetary transmission of the Ford gave this control 
and anybody could work it. That is the " why " of the say- 
ing: "Anybody can drive a Ford." It can turn aroimd 
almost anywhere. 

(7) The more a motor car weighs, naturally the more 
fuel and lubricants are used in the driving; the lighter the 
weight, the lighter the expense of operation. The light 
weight of the Ford car in its early years was used as an 
argument against it. Now that is all changed. 

The design which I settled upon was called "Model T. " 
The important feature of the new model — which, if it were 
accepted, as I thought it would be, I intended to make the 


only model and then start into real production — was its 
simplicity. There were but four constructional imits 
in the car — the power plant, the frame, the front axle, and 
the rear axle. All of these were easily accessible and they 
were designed so that no special skill would be required 
for their repair or replacement. I believed then, although 
I said very little about it because of the novelty of the idea, 
that it ought to be possible to have parts so simple and so 
inexpensive that the menace of expensive hand repair 
work would be entirely eliminated. The parts could be 
made so cheaply that it would be less expensive to buy 
new ones than to have old ones repaired. They could be 
carried in hardware shops just as nails or bolts are carried. 
I thought that it was up to me as the designer to make the 
car so completely simple that no one could fail to under- 
stand it. 

That works both ways and applies to everything. The 
less complex an article, the easier it is to make, the cheaper 
it may be sold, and therefore the greater number may be 

It is not necessary to go into the technical details of the 
construction but perhaps this is as good a place as any to 
review the various models, because "Model T" was the 
last of the models and the policy which it brought about 
took this business out of the ordinary line of business. 
Application of the same idea would take any business out 
of the ordinary run. 

I designed eight models in all before "Model T. '* 
They were: "Model A," "Model B," "Model C," 
"Model F," "Model N," "Model R," "Model S," and 
"Model K." Of these. Models "A," "C," and "F" 
had two-cylinder opposed horizontal motors. In "Model 
A" the motor was at the rear of the driver's seat. In all 
of the other models it was in a hood in front. Models 
"B," "K" "R," and "S" had motors of the four- 


cylinder vertical type. "Model K" had six cylinders. 
"Model A" developed eight horsepower. "Model B'* 
developed twenty-four horsepower with a 43^-inch 
cylinder and a 5-inch stroke. The highest horsepower 
was in "Model K, " the six-cylinder car, which developed 
forty horsepower. The largest cylinders were those of 
"Model B." The smallest were in Models "N," "R," 
and "S" which were S^ inches in diameter with a 3^-inch 
stroke. "Model T" has a 3j^-inch cylinder with a 4-inch 
stroke. The ignition was by dry batteries in all excepting 
"Model B," which had storage batteries, and in "Model 
K" which had both battery and magneto. In the present 
model, the magneto is a part of the power plant and is 
built in. The clutch in the first four models w^as of the 
cone type; in the last four and in the present model, of the 
multiple disc type. The transmission in all of the cars 
has been planetary. "Model A" had a chain drive. 
"Model B" had a shaft drive. The next two models had 
chain drives. Since then all of the cars have had shaft 
drives. "Model A" had a 72-inch wheel base. Model 
"B," which was an extremely good car, had 92 inches. 
"Model K" had 120 inches. "Model C" had 78 inches. 
The others had 84 inches, and the present car has 100 
inches. In the first five models all of the equipment was 
extra. The next tliree were sold with a partial equipment. 
The present car is sold with full equipment. Model "A'' 
weighed 1,250 pounds. The lightest cars w^ere Models 
*'N" and "R." They weighed 1,050 pounds, but they 
were both runabouts. The heaviest car was the six- 
cylinder, which weighed 2,000 pounds. The present car 
weighs 1,200 lbs. 

The "Model T" had practically no features which were 
not contained in some one or other of the previous models. 
Every detail had been fully tested in practice. There was 
no guessing as to whether or not it would be a successful 


model. It had to be. There was no way it could escape 
being so, for it had not been made in a day. It contained 
all that I was then able to put into a motor car plus 
the material, which for the first time I was able to 
obtain. We put out "Model T" for the season 1908- 

The company was then five years old. The original 
factory space had been .28 acre. We had employed an^ 
average of 311 people in the first year, built 1,708 cars, and 
had one branch house. In 1908, the factory space had 
increased to 2.65 acres and we owned the building. The 
average number of employees had increased to 1,908. 
We built 6,181 cars and had fourteen branch houses. 
It was a prosperous business. ' 

During the season 1908-1909 we continued to make 
Models "R" and *'S," four-cylinder runabouts and road- 
sters, the models that had previously been so successful, 
and which sold at $700 and $750. But "Model T" 
swept them right out. We sold 10,607 cars — a larger 
number than any manufacturer had ever sold. The 
price for the touring car was $850. On the same chassis 
we mounted a town car at $1,000, a roadster at $825, a 
coup6 at $950, and a landaulet at $950. 

This season demonstrated conclusively to me that it was 
time to put the new policy in force. The salesmen, 
before I had announced the policy, were spurred by the 
great sales to think that even greater sales might be had 
if only we had more models. It is strange how, just as 
soon as an article becomes successful, somebody starts to 
think that it would be more successful if only it were 
different. There is a tendency to keep monkeying with 
styles and to spoil a good thing by changing it. The 
salesmen were insistent on increasing the line. They 
listened to the 5 per cent., the special customers who 
could say what they wanted, and forgot all about the 


95 per cent, who just bought without making any 
fuss. No business can improve unless it pays the closest 
possible attention to complaints and suggestions. If 
there is any defect in service then that must be instantly 
and rigorously investigated, but when the suggestion is 
only as to style, one has to make sure whether it is not 
merely a personal whim that is being voiced. Salesmen 
always want to cater to whims instead of acquiring suffi- 
cient knowledge of their product to be able to explain to the 
customer with the whim that what they have will satisfy 
his every requirement — that is, of course, provided what 
they have does satisfy these requirements. 

Therefore in 1909 I announced one morning, without 
any previous warning, that in the future we were going 
to build only one model, that the model was going to be 
"Model T, " and that the chassis would be exactly the 
same for all cars, and I remarked: 

"Any customer can have a car painted any colour that 
he wants so long as it is black. " 

I cannot say that any one agreed with me. The selling 
people could not of course see the advantages that a single 
model would bring about in production. More than that, 
they did not particularly care. They thought that our 
production was good enough as it was and there was a very 
decided opinion that lowering the sales price would hurt 
sales, that the people who wanted quality would be driven 
away and that there would be none to replace them. 
There was very little conception of the motor industry. 
A motor car was still regarded as something in the way 
of a luxury. The manufacturers did a good deal to 
spread this idea. Some clever persons invented the 
name "pleasure car" and the advertising emphasized the 
pleasure features. The sales people had ground for their 
objections and particularly when I made the following 
announcement : 


I will build a motor car for the great multitude. It will be large 
enough for the family but small enough for the individual to run 
and care for. It will be constructed of the best materials, by the 
best men to be hired, after the simplest designs that modern engineer- 
ing can devise. But it will be so low in price that no man making a 
good salary will be unable to own one — and enjoy with his family 
the blessing of hours of pleasure in God's great open spaces. 

This announcement was received not without pleasure. 
The general comment was : 

*'If Ford does that he will be out of business in six 
months. " 

The impression was that a good car could not be built 
at a low price, and that, anyhow, there was no use in 
building a low-priced car because only wealthy people 
were in the market for cars. The 1908-1909 sales of more 
than ten thousand cars had convinced me that we needed 
a new factory. We already had a big modern factory — 
the Piquette Street plant. It was as good as, perhaps a 
little better than, any automobile factory in the country. 
But I did not see how it was going to care for the sales and 
production that were inevitable. So I bought sixty acres 
at Highland Park, which was then considered away out in 
the country from Detroit. The amount of ground bought 
and the plans for a bigger factory than the world has ever 
seen were opposed. The question was already being 
asked : 

"How soon will Ford blow up.'*" 

Nobody knows how many thousand times it has been 
asked since. It is asked only because of the failure to 
grasp that a principle rather than an individual is at work, 
and the principle is so simple that it seems mysterious. 

For 1909-1910, in order to pay for the new land and 
buildings, I slightly raised the prices. This is perfectly 
justifiable and results in a benefit, not an injury, to the 
purchaser. I did exactly the same thing a few years ago — 
or rather, in that case I did not lower the price as is my 


annual custom, in order to build the River Rouge plant. 
The extra money might in each case have been had by 
borrowing, but then we should have had a continuing 
charge upon the business and all subsequent cars would 
have had to bear this charge. The price of all the models 
was increased $100, with the exception of the roadster, 
which was increased only $75 and of the landaulet and town 
car, which were increased $150 and $200 respectively. We 
sold 18,664 cars, and then for 1910-1911, with the new 
facilities, I cut the touring car from $950 to $780 and we 
sold 34,528 cars. That is the beginning of the steady 
reduction in the price of the cars in the face of ever-in- 
creasing cost of materials and ever-higher wages. 

Contrast the year 1908 with the year 1911. The 
factory space increased from 2.Q5 to 32 acres. The aver- 
age number of employees from 1,908 to 4,110, and the cars 
built from a little over six thousand to nearly thirty -five 
thousand. You will note that men were not employed in 
proportion to the output. 

We w^ere, almost overnight it seems, in great production. 
How did all this come about? 

Simply through the application of an inevitable prin- 
ciple. By the application of intelligently directed power 
and machinery. In a little dark shop on a side street an 
old man had laboured for years making axe handles. 
Out of seasoned hickory he fashioned them, with the help 
of a draw shave, a chisel, and a supply of sandpaper. 
Carefully was each handle weighed and balanced. No 
two of them were alike. The curve must exactly fit the 
hand and must conform to the grain of the wood. From 
dawn until dark the old man laboured. His average 
product w^as eight handles a w^eek, for which he received a 
dollar and a half each. And often some of these were 
unsaleable — because the balance was not true. 

To-day you can buy a better axe handle, made by 


machinery, for a few cents. And you need not worry 
about the balance. They are all alike — and every one is 
perfect. Modern methods applied in a big way have not 
only brought the cost of axe handles down to a fraction of 
their former cost — but they have immensely improved 
the product. 

It was the application of these same methods to the 
making of the Ford car that at the very start lowered the 
price and heightened the quality. We just developed an 
idea. The nucleus of a business may be an idea. That is, 
an inventor or a thoughtful workman works out a new and 
better way to serve some established human need; the idea 
commends itself, and people want to avail themselves of it. 
In this way a single individual may prove, through his idea 
or discovery, the nucleus of a business. But the creation of 
the body and bulk of that business is shared by everyone 
who has anything to do with it. No manufacturer can 
say: *'I built this business" — if he has required the help 
of thousands of men in building it. It is a joint production. 
Everyone employed in it has contributed something to it. 
By working and producing they make it possible for the 
purchasing world to keep coming to that business for the 
type of service it provides, and thus they help establish 
a custom, a trade, a habit which supplies them with a 
livelihood. That is the way our company grew and just 
how I shall start explaining in the next chapter. 

In the meantime, the company had become world-wide. 
We had branches in London and in Australia. We were 
shipping to every part of the world, and in England 
particularly we were beginning to be as well known as in 
America. The introduction of the car in England was 
somewhat difficult on account of the failure of the Ameri- 
can bicycle. Because the American bicycle had not been 
suited to English uses it was taken for granted and made a 
point of by the distributors that no American vehicle 


could appeal to the British market. Two "Model A*s" 
found their way to England in 1903. The newspapers 
refused to notice them. The automobile agents refused 
to take the slightest interest. It was rumoured that the 
principal components of its manufacture were string and 
hoop wire and that a buyer would be lucky if it held 
together for a fortnight! In the first year about a dozen 
cars in all were used; the second was only a little better. 
And I may say as to the reliability of that "Model A" 
that most of them after nearly twenty years are still in 
some kind of service in England. 

In 1905 our agent entered a "Model C" in the Scottish 
Reliability Trials. In those days reliability runs were 
more popular in England than motor races. Perhaps there 
was an inkling that after all an automobile was not 
merely a toy. The Scottish Trials was over eight 
hundred miles of hilly, heavy roads. The Ford came 
through with only one involuntary stop against it. 
That started the Ford sales in England. In that same 
year Ford taxicabs were placed in London for the first 
time. In the next several years the sales began to pick up. 
The cars went into every endurance and reliability test 
and won every one of them. The Brighton dealer had 
ten Fords driven over the South Downs for two days in a 
kind of steeplechase and every one of them came through. 
As a result six hundred cars were sold that year. In 1911 
Henry Alexander drove a "Model T" to the top of Ben 
Nevis, 4,600 feet. That year 14,060 cars were sold in 
England, and it has never since been necessary to stage 
any kind of a stunt. We eventually opened our own 
factory at Manchester; at first it was purely an assembling 
plant. But as the years have gone by we have progres- 
sively made more and more of the car. 


Getting into Production 

IF a device would save in time just 10 per cent, or 
increase results 10 per cent., then its absence is 
always a 10 per cent. tax. If the time of a person 
is worth fifty cents an hour, a 10 per cent, saving is worth 
five cents an hour. If the owner of a skyscraper could 
increase his income 10 per cent, he would willingly pay 
half the increase just to know how. The reason why he 
owns a skyscraper is that science has proved that cer- 
tain materials, used in a given way, can save space and 
increase rental incomes. A building thirty stories high 
needs no more ground space than one five stories high. 
Getting along with the old-style architecture costs the 
five-story man the income of twenty-five floors. Save ten 
steps a day for each of twelve thousand employees and you 
will have saved fiity miles of wasted motion and misspent 

Those are the principles on which the production of my 
plant was built up. They all come practically as of 
course. In the beginning we tried to get machinists. 
As the necessity for production increased it became appar- 
ent not only that enough machinists were not to be had, 
but also that skilled men were not necessary in production, 
and out of this grew a principle that I later want to pre- 
sent in full. 

It is self-evident that a majority of the people in the 
world are not mentally — even if they are physically — 
capable of making a good living. That is, they are not 
capable of furnishing with their own hands a sufficient 


quantity of the goods which this world needs to be able 
to exchange their unaided product for the goods which they 
need. I have heard it said, in fact I believe it is quite a 
current thought, that we have taken skill out of work. 
We have not. We have put in skill. We have put a 
higher skill into planning, management, and tool building, 
and the results of that skill are enjoyed by the man who is 
not skilled. This I shall later enlarge on. 

We have to recognize the unevenness in human mental 
equipments. If every job in our place required skill 
the place would never have existed. Sufficiently skilled 
men to the number needed could not have been trained in 
a hundred years. A million men working by hand could 
not even approximate our present daily output. No one 
could manage a million men. But more important than 
that, the product of the unaided hands of those million 
men could not be sold at a price in consonance with buying 
power. And even if it were possible to imagine such an 
aggregation and imagine its management and correlation, 
just think of the area that it would have to occupy ! How 
many of the men would be engaged, not in producing, but 
in merely carrying from place to place what the other men 
had produced? I cannot see how under such conditions 
the men could possibly be paid more than ten or twenty 
cents a day — for of course it is not the employer who pays 
wages. He only handles the money. It is the product 
that pays the wages and it is the management that 
arranges the production so that the product may pay the 

The more economical methods of production did not 
begin all at once. They began gradually — just as we 
began gradually to make our own parts. "Model T" 
was the first motor that we made ourselves. The great 
economies began in assembling and then extended to other 
sections so that, while to-day we have skilled mechanics, 


in plenty, they do not produce automobiles — they make 
it easy for others to produce them. Our skilled men are 
the tool makers, the experimental workmen, the machinists, 
and the pattern makers. They are as good as any men in 
the world — so good, indeed, that they should not be wasted 
in doing that which the machines they contrive can do 
better. The rank and file of men come to us unskilled; 
they learn their jobs within a few hours or a few days. 
If they do not learn within that time they will never be of 
any use to us. These men are, many of them, foreigners, 
and all that is required before they are taken on is that 
they should be potentially able to do enough work to pay 
the overhead charges on the floor space they occupy. 
They do not have to be able-bodied men. We have jobs 
that require great physical strength — although they are 
rapidly lessening; we have other jobs that require no 
strength whatsoever — ^jobs which, as far as strength is 
concerned, might be attended to by a child of three. 

It is not possible, without going deeply into technical 
processes, to present the whole development of manu- 
facturing, step by step, in the order in which each thing 
came about. I do not know that this could be done, be- 
cause something has been happening nearly every day and 
nobody can keep track. Take at random a number of the 
changes. From them it is possible not only to gain some 
idea of what will happen when this world is put on a 
production basis, but also to see how much more we pay 
for things than we ought to, and how much lower wages 
are than they ought to be, and what a vast field remains 
to be explored. The Ford Company is only a little way 
along on the journey. 

A Ford car contains about five thousand parts — that is 
counting screws, nuts, and all. Some of the parts are 
fairly bulky and others are almost the size of watch parts. 
In our first assembling we simply started to put a car 


together at a spot on the floor and workmen brought to it 
the parts as they were needed in exactly the same way 
that one builds a house. When we started to make parts 
it was natural to create a single department of the factory 
to make that part, but usually one workman performed 
all of the operations necessary on a small part. The 
rapid press of production made it necessary to devise plans 
of production that would avoid having the workers falling 
over one another. The undirected worker spends more of 
his time walking about for materials and tools than he 
does in working; he gets small pay because pedestrianism 
is not a highly paid line. 

The first step forward in assembly came when we began 
taking the work to the men instead of the men to the 
work. We now have two general principles in all opera- 
tions — that a man shall never have to take more than one 
step, if possibly it can be avoided, and that no man need 
ever stoop over. 
. The principles of assembly are these: 

(1) Place the tools and the men in the sequence of the 
operation so that each component part shall travel the 
least possible distance while in the process of finishing. 

(2) Use work slides or some other form of carrier so 
that when a workman completes his operation, he drops 
the part always in the same place — which place must 
always be the most convenient place to his hand — and if 
possible have gravity carry the part to the next work- 
man for his operation. 

(3) Use sliding assembling lines by which the parts to 
be assembled are delivered at convenient distances. 

The net result of the appHcation of these principles is 
the reduction of the necessity for thought on the part of 
the worker and the reduction of his movements to a 
minimum. He does as nearly as possible only one thing 
with only one movement. 


The assembling of the chassis is, from the point of view 
of the non-mechanical mind, our most interesting and 
perhaps best known operation, and at one time it was an 
exceedingly important operation. We now ship out the 
parts for assembly at the point of distribution. 

Along about April 1, 1913, we first tried the experiment 
of an assembly line. We tried it on assembling the fly- 
wheel magneto. We try everything in a little way first — 
we will rip out anything once we discover a better way, 
but we have to know absolutely that the new way is going 
to be better than the old before we do anything drastic. 

I believe that this was the first moving line ever installed. 
The idea came in a general way from the overhead trolley 
that the Chicago packers use in dressing beef. We had 
previously assembled the fly-wheel magneto in the usual 
method. With one workman doing a complete job he 
could turn out from thirty-five to forty pieces in a nine- 
hour day, or about twenty minutes to an assembly. 
What he did alone was then spread into twenty-nine 
operations; that cut down the assembly time to thirteen 
minutes, ten seconds. Then we raised the height of 
the line eight inches — this was in 1914 — and cut the time 
to seven minutes. Further experimenting with the speed 
that the work should move at cut the time down to five 
minutes. In short, the result is this: by the aid of scienti- 
fic study one man is now able to do somewhat more than 
four did only a comparatively few years ago. That 
line established the eflSciency of the method and we now 
use it everywhere. The assembling of the motor, formerly 
done by one man, is now divided into eighty-four opera- 
tions — those men do the work that three times their num- 
ber formerly did. In a short time we tried out the plan 
on the chassis. 

About the best we had done in stationary chassis 
assembling was an average of twelve hours and twenty- 


eight minutes per chassis. We tried the experiment of 
drawing the chassis with a rope and windlass down a hne 
two hundred fifty feet long. Six assemblers travelled with 
the chassis and picked up the parts from piles placed along 
the line. This rough experiment reduced the time to five 
hours fifty minutes per chassis. In the early part of 1914 
we elevated the assembly line. We had adopted the 
policy of "man-high" work; we had one line twenty-six 
and three quarter inches and another twenty-four and 
one half inches from the floor — to suit squads of different 
heights. The waist-high arrangement and a further 
subdivision of work so that each man had fewer move- 
ments cut down the labour time per chassis to one hour 
thirty-three minutes. Only the chassis was then assem- 
bled in the line. The body was placed on in "John R. 
Street" — the famous street that runs through our High- 
land Park factories. Now the line assembles the whole 

It must not be imagined, however, that all this worked 
out as quickly as it sounds. The speed of the moving 
work had to be carefully tried out; in the fly-wheel 
magneto we first had a speed of sixty inches per minute. 
That was too fast. Then we tried eighteen inches per 
minute. That was too slow. Finally we settled on 
forty-four inches per minute. The idea is that a man 
must not be hurried in his work — ^he must have every 
second necessary but not a single unnecessary second. 
We have worked out speeds for each assembly, for the 
success of the chassis assembly caused us gradually to 
overhaul our entire method of manufacturing and to put 
all assembling in mechanically driven lines. The chassis 
assembling line, for instance, goes at a pace of six feet per 
minute; the front axle assembly line goes at one hundred 
eighty-nine inches per minute. In the chassis assembling 
are forty-five separate operations or stations. The first 


men fasten four mud-guard brackets to the chassis frame; 
the motor arrives on the tenth operation and so on in 
detail. Some men do only one or two small operations, 
others do more. The man who places a part does not 
fasten it — the part may not be fully in place until after 
several operations later. The man who puts in a bolt does 
not put on the nut; the man who puts on the nut does not 
tighten it. On operation number thirty-four the bud- 
ding motor gets its gasoline; it has previously received 
lubrication; on operation number forty-four the radiator 
is filled with water, and on operation number forty-five 
the car drives out onto John R. Street. 

Essentially the same ideas have been applied to the 
assembling of the motor. In October, 1913, it required 
nine hours and fifty-four minutes of labour time to assemble 
one motor; six months later, by the moving assembly 
method, this time had been reduced to five hours and 
fifty-six minutes. Every piece of work in the shops 
moves; it may move on hooks on overhead chains going to 
assembly in the exact order in which the parts are required; 
it may travel on a moving platform, or it may go by 
gravity, but the point is that there is no lifting or trucking 
of anything other than materials. Materials are brought 
in on small trucks or trailers operated by cut-down Ford 
chassis, which are sufiiciently mobile and quick to get in 
and out of any aisle where they may be required to go. 
No workman has anything to do with moving or lifting 
anything. That is all in a separate department — ^the 
department of transportation. 

We started assembling a motor car in a single factory. 
Then as we began to make parts, we began to departmen- 
talize so that each department would do only one thing. 
As the factory is now organized each department makes 
only a single part or assembles a part. A department is a 
b'ttle factory in itself. The part comes into it as raw 


material or as a casting, goes through the sequence of 
machines and heat treatments, or whatever may be 
required, and leaves that department finished. It was 
only because of transport ease that the departments 
were grouped together when we started to manufacture* 
I did not know that such minute divisions would be pos- 
sible; but as our production grew and departments multi-' 
plied, we actually changed from making automobiles 
to making parts. Then we found that we had made 
another new discovery, which was that by no means all 
of the parts had to be made in one factory. It was not 
really a discovery — it was something in the nature of going 
around in a circle to my first manufacturing when I 
bought the motors and probably ninety per cent, of the 
parts. When we began to make our own parts we prac- 
tically took for granted that they all had to be made in 
the one factory — that there was some special virtue in 
having a single roof over the manufacture of the entire car. 
We have now developed away from this. If we build an/ 
more large factories, it will be only because the making of 
a single part must be in such tremendous volume as to 
require a large unit. I hope that in the course of time the 
big Highland Park plant will be doing only one or two 
things. The casting has already been taken away from it 
and has gone to the River Rouge plant. So now we are on 
our way back to where we started from — excepting that, 
instead of buying our parts on the outside, we are begin- 
ning to make them in our own factories on the outside. 

This is a development w^hich holds exceptional conse- 
quences, for it means, as I shall enlarge in a later chapter, 
that highly standardized, highly subdivided industry need 
no longer become concentrated in large plants with all the 
inconveniences of transportation and housing that hamper 
large plants. A thousand or five hundred men ought to be 
enough in a single factory; then there would be no problem 


of transporting them to work or away from work and there 
would be no slums or any of the other unnatural ways of 
living incident to the overcrowding that must take place 
if the workmen are to live within reasonable distances of a 
very large plant. 

Highland Park now has five hundred departments. 
Down at our Piquette plant we had only eighteen depart- 
ments, and formerly at Highland Park we had only one 
hundred and fifty departments. This illustrates how far 
we are going in the manufacture of parts. 

Hardly a week passes without some improvement being 
made somewhere in machine or process, and sometimes 
this is made in defiance of what is called *'the best shop 
practice." I recall that a machine manufacturer was 
once called into conference on the building of a special 
machine. The specifications called for an output of two 
hundred per hour. 

"This is a mistake," said the manufacturer, "you mean 
two himdred a day — ^no machine can be forced to two 
hundred an hour. " 

The company officer sent for the man who had designed 
the machine and they called his attention to the speci- 
fication. He said: 

"Yes, what about it.?" 

"It can't be done," said the manufacturer positively, 
**no machine built will do that — it is out of the question." 

"Out of the question!" exclaimed the engineer, "if you 
will come down to the main floor you will see one doing it; 
we built one to see if it could be done and now we want 
more like it. " 

The factory keeps no record of experiments. The fore- 
men and superintendents remember what has been done. 
If a certain method has formerly been tried and failed, 
somebody will remember it — but I am not particularly 
anxious for the men to remember what someone else has 


tried to do in the past, for then we might quickly accumu- 
late far too many things that could not be done. That is 
one of the troubles with extensive records. If you keep 
on recording all of your failures you will shortly have a list 
showing that there is nothing left for you to try — whereas 
it by no means follows because one man has failed in a 
certain method that another man will not succeed. 

They told us we could not cast gray iron by our endless 
chain method and I believe there is a record of failures. 
But we are doing it. The man who carried through our 
work either did not know or paid no attention to the 
previous figures. Likewise we were told that it was out of 
the question to pour the hot iron directly from the blast 
furnace into mould. The usual method is to run the iron 
into pigs, let them season for a time, and then remelt them 
for casting. But at the River Rouge plant we are casting 
directly from cupolas that are filled from the blast furnaces. 
Then, too, a record of failures — ^particularly if it is a digni- 
fied and well-authenticated record — deters a young man 
from trying. We get some of our best results from letting 
fools rush in where angels fear to tread. 

None of our men are "experts." We have most 
unfortunately found it necessary to get rid of a man as 
soon as he thinks himself an expert — because no one ever 
considers himself expert if he really knows his job. A man 
who knows a job sees so much more to be done than he 
has done, that he is always pressing forward and never 
gives up an instant of thought to how good and how 
efficient he is. Thinking always ahead, thinking always of 
trying to do more, brings a state of mind in which nothing 
is impossible. The moment one gets into the "expert" 
state of mind a great number of things become impossible. 

I refuse to recognize that there are imposaibilities. 
I cannot discover that any one knows enough about any- 
thing on this earth definitely to say what is and what is not 


possible. The right kind of experience, the right kind of 
technical training, ought to enlarge the mind and reduce 
the number of impossibilities. It tmfortunately does 
nothing of the kind. Most technical training and the 
average of that which we call experience, provide a record 
of previous failures and, instead of these failures being 
taken for what they are worth, they are taken as absolute 
bars to progress. If some man, calling himself an 
authority, says that this or that cannot be done, then a 
horde of unthinking followers start the chorus: *'It can't 
be done." 

Take castings. • Casting has always been a wasteful 
process and is so old that it has accumulated many 
traditions which make improvements extraordinarily 
difficult to bring about. I believe one authority on mould- 
ing declared — before we started our experiments — that 
any man who said he could reduce costs within half a year 
wrote himself down as a fraud. 

Our foundry used to be much like other foundries. 
When we cast the first "Model T" cylinders in 1910, every- 
thing in the place was done by hand; shovels and wheel- 
barrows abounded. The work was then either skilled 
or unskilled ; we had moulders and we had labourers. Now 
we have about five per cent, of thoroughly skilled mould- 
ers and core setters, but the remaining 95 per cent, 
are unskilled, or to put it more accurately, must be skilled 
in exactly one operation which the most stupid man can 
learn within two days. The moulding is all done by 
machinery. Each part which we have to cast has a unit 
or imits of its own — according to the number required in 
the plan of production. The machinery of the unit is 
adapted to the single casting; thus the men in the unit 
each perform a single operation that is always the same. 
A imit consists of an overhead railway to which at intervals 
are hung little platforms for the moulds. Without going 


into technical details, let me say the making of the moulds 
and the cores, and the packing of the cores, are done with 
tlie work in motion on the platforms. The metal is poured 
at another point as the work moves, and by the time the 
mould in which the metal has been poured reaches the 
terminal, it is cool enough to start on its automatic way 
to cleaning, machining, and assembling. And the platform 
is moving around for a new load. 

Take the development of the piston-rod assembly. 
Even under the old plan, this operation took only three 
minutes and did not seem to be one to bother about. 
There were two benches and twenty -eight men in all; 
they assembled one hundred seventy -five pistons and rods 
in a nine-hour day — which means just five seconds over 
three minutes each. There was no inspection, and many 
of the piston and rod assemblies came back from the motof 
assembling line as defective. It is a very simple operation. 
The workman pushed the pin out of the piston, oiled the 
pin, slipped the rod in place, put the pin through the rod 
and piston, tightened one screw, and opened another screw. 
That was the whole operation. The foreman, examining 
the operation, could not discover why it should take as 
much as three minutes. He analyzed the motions with a 
stop-watch. He found that four hours out of a nine-hour 
day were spent in walking. The assembler did not go off 
anywhere, but he had to shift his feet to gather in his 
materials and to push away his finished piece. In the 
whole task, each man performed six operations. The fore- 
man devised a new plan ; he split the operation into three 
divisions, put a slide on the bench and three men on each 
side of it, and an inspector at the end. Instead of one man 
performing the whole operation, one man then performed 
only one third of the operation — he performed only as 
much as he could do without shifting his feet. They 
cut down the squad from twenty -eight to fourteen men. 


The former record for twenty-eight men was one hundred 
seventy-five assemblies a day. Now seven men turn out 
twenty-six hundred assembhes in eight hours. It is not 
necessary to calculate the savings there! 

Painting the rear axle assembly once gave some trouble. 
It used to be dipped by hand into a tank of enamel. 
This required several handlings and the services of two 
men. Now one man takes care of it all on a special 
machine, designed and built in the factory. The man now 
merely hangs the assembly on a moving chain which carries 
it up over the enamel tank, two levers then thrust thimbles 
over the ends of the ladle shaft, the paint tank rises six feet, 
immerses the axle, returns to position, and the axle goes on 
to the drying oven. The whole cycle of operations now 
takes just thirteen seconds. 

The radiator is a complex affair and soldering it used 
to be a matter of skill. There are ninety-five tubes in 
a radiator. Fitting and soldering these tubes in place 
is by hand a long operation, requiring both skill and pa- 
tience. Now it is all done by a machine which will make 
twelve hundred radiator cores in eight hours; then they 
are soldered in place by being carried through a furnace 
by a conveyor. No tinsmith work and so no skill are 

We used to rivet the crank-case arms to the crank-case, 
using pneumatic hammers which were supposed to be the 
latest development. It took six men to hold the hammers 
and six men to hold the casings, and the din was terrific. 
Now an automatic press operated by one man, who does 
nothing else, gets through five times as much work in a day 
as those twelve men did. 

In the Piquette plant the cylinder casting travelled four 
thousand feet in the course of finishing; now it travels 
only slightly over three hundred feet. 

There is no manual handling of material. There is not a 


single hand operation. If a machine can be made auto- 
matic, it is made automatic. Not a single operation is 
ever considered as being done in the best or cheapest way. 
At that, only about ten per cent, of our tools are special; 
the others are regular machines adjusted to the particular 
job. And they are placed almost side by side. We put 
more machinery per square foot of floor space than any 
other factory in the world — every foot of space not used 
carries an overhead expense. We want none of that waste. 
Yet there is all the room needed — no man has too much 
room and no man has too little room. Dividing and sub- 
dividing operations, keeping the work in motion — those 
are the keynotes of production. But also it is to be 
remembered that all the parts are designed so that they 
can be most easily made. And the saving.'^ Although 
the comparison is not quite fair, it is startling. If at our 
present rate of production we employed the same number 
of men per car that we did when we began in 190S — and 
those men were only for assembly — we should to-day 
require a force of more than two hundred thousand. We 
have less than fifty thousand men on automobile produc-^ 
tion at our highest point of around four thousand cars a 


Machines and Men 

THAT which one has to fight hardest against in 
bringing together a large number of people to do 
work is excess organization and consequent red 
tape. To my mind there is no bent of mind more dangerous 
than that which is sometimes described as the *' genius for 
organization. " This usually results in the birth of a great 
big chart showing, after the fashion of a family tree, 
how authority ramifies. The tree is heavy with nice 
round berries, each of which bears the name of a man or of 
an office. Every man has a title and certain duties which 
are strictly limited by the circumference of his berry. 

If a straw boss wants to say something to the general 
superintendent, his message has to go through the sub- 
foreman, the foreman, the department head, and all the 
assistant superintendents, before, in the course of time, 
it reaches the general superintendent. Probably by that 
time what he wanted to talk about is already history. 
It takes about six weeks for the message of a man living 
in a berry on the lower left-hand corner of the chart to reach 
the president or chairman of the board, and if it ever 
does reach one of these august officials, it has by that 
time gathered to itself about a pound of criticisms, sug- 
gestions, and comments. Very few things are ever taken 
under *' official consideration" until long after the time 
when they actually ought to have been done. The buck 
is passed to and fro and all responsibility is dodged by in- 
dividuals — following the lazy notion that two heads are 
better than one. 


Now a business, in my way of thinking, is not a machineu 
It is a collection of people who are brought together to do 
work and not to write letters to one another. It is not 
necessary for any one department to know what any other 
department is doing. If a man is doing his work he will 
not have time to take up any other work. It is the busi- 
ness of those who plan the entire work to see that all of 
the departments are working properly toward the same 
end. It is not necessary to have meetings to establish 
good feeling between individuals or departments. It is 
not necessary for people to love each other in order to work 
together. Too much good fellowship may indeed be a 
very bad thing, for it may lead to one man trying to cover 
up the faults of another. That is bad for both men. 

When we are at work we ought to be at work. When we 
are at play we ought to be at play. There is no use trying 
to mix the two. The sole object ought to be to get the 
work done and to get paid for it. When the work is done, 
then the play can come, but not before. And so the Ford 
factories and enterprises have no organization, no specific 
duties attaching to any position, no line of succession or of 
authority, very few titles, and no conferences. We have 
only the clerical help that is absolutely required; we have 
no elaborate records of any kind, and consequently no 
red tape. 

We make the individual responsibility complete. The 
workman is absolutely responsible for his work. The 
straw boss is responsible for the workmen under him. 
The foreman is responsible for his group. The depart- 
ment head is responsible for the department. The general 
superintendent is responsible for the whole factory. Every 
man has to know what is going on in his sphere. I say 
** general superintendent.'* There is no such formal title. 
One man is in charge of the factory and has been for years. 
He has two men with him, who, without in any way 


having their duties defined, have taken particular sections 
of the work to themselves. With them are about half 
a dozen other men in the nature of assistants, but without 
specific duties. They have all made jobs for themselves — 
but there are no limits to their jobs. They just work in 
where they best fit. One man chases stock and shortages. 
Another has grabbed inspection, and so on. 

This may seem haphazard, but it is not. A group of men, 
wholly intent upon getting work done, have no diflaculty 
in seeing that the work is done. They do not get into 
trouble about the limits of authority, because they are not 
thinking of titles. If they had oflSces and all that, they 
would shortly be giving up their time to office work and to 
wondering why did they not have a better office than some 
other fellow. 

Because there are no titles and no limits of authority, 
there is no question of red tape or going over a man's 
head. Any workman can go to anybody, and so estab- 
lished has become this custom, that a foreman does not get 
sore if a workman goes over him and directly to the head of 
the factory. The workman rarely ever does so, because a 
foreman knows as well as he knows his own name that 
if he has been imjust it will be very quickly found out, 
and he shall no longer be a foreman. One of the things 
that we will not tolerate is injustice of any kind. The 
moment a man starts to swell with authority he is dis- 
covered, and he goes out, or goes back to a machine^ 
A large amount of labour unrest comes from the unjust 
exercise of authority by those in subordinate positions, 
and I am afraid that in far too many manufacturing in- 
stitutions it is really not possible for a workman to get 
a square deal. 

The work and the work alone controls us. That is one 
of the reasons why we have no titles. Most men can 
swing a job, but they are floored by a title. The effect of a 


title is very peculiar. It has been used too much as a sign 
of emancipation from work. It is almost equivalent to a 
badge bearing the legend : 

"This man has nothing to do but regard himself as 
important and all others as inferior. " 

Not only is a title often injurious to the wearer, but it 
has its effect on others as well. There is perhaps no greater 
single source of personal dissatisfaction among men than 
the fact that the title-bearers are not always the real 
leaders. Everybody acknowledges a real leader — a. man 
who is fit to plan and command. And when you find a 
real leader who bears a title, you will have to inquire of 
someone else what his title is. He doesn't boast about it. 

Titles in business have been greatly overdone and busi- 
ness has suffered. One of the bad features is the division 
of responsibility according to titles, which goes so far as to 
amount to a removal altogether of responsibility. Where 
responsibility is broken up into many small bits and 
divided among many departments, each department under 
its own titular head, who in turn is surrounded by a 
group bearing their nice sub-titles, it is difficult to find 
any one who really feels responsible. Everyone knows 
what "passing the buck" means. The game must have 
originated in industrial organizations where the depart- 
ments simply shove responsibility along. The health of 
every organization depends on every member — ^whatever 
his place — ^feeling that everything that happens to come 
to his notice relating to the welfare of the business is his 
own job. Railroads have gone to the devil under the 
eyes of departments that say: 

"Oh, that doesn't come under our department. De- 
partment X, 100 miles away, has that in charge." 

There used to be a lot of advice given to officials not 
to hide behind their titles. The very necessity for the 
advice showed a condition that needed more than advice 


to correct it. And the correction is just this — abohsh the 
titles. A few may be legally necessary; a few may be 
useful in directing the public how to do business with the 
concern, but for the rest the best rule is simple: "Get rid 
of them." 

As a matter of fact, the record of business in general 
just now is such as to detract very much from the value 
of titles. No one would boast of being president of a 
bankrupt bank. Business on the whole has not been so 
skillfully steered as to leave much margin for pride in the 
steersmen. The men who bear titles now and are worth 
anything are forgetting their titles and are down in the 
foundation of business looking for the weak spots. They 
are back again in the places from which they rose — ^trying 
to reconstruct from the bottom up. And when a man is 
really at work, he needs no title. His work honours him. 

All of our people come into the factory or the offices 
through the emplo;^anent departments. As I have said, 
we do not hire experts — ^neither do we hire men on past 
experiences or for any position other than the lowest. 
Since we do not take a man on his past history, we do not 
refuse him because of his past history. I never met a man 
who was thoroughly bad. There is always some good in 
him — ^if he gets a chance. That is the reason we do not 
care in the least about a man's antecedents — ^we do not 
hire a man's history, we hire the man. If he has been in 
jail, that is no reason to say that he will be in jail again. 
I think, on the contrary, he is, if given a chance, very 
likely to make a special effort to keep out of jail. Our 
employment office does not bar a man for anji;hing he has 
previously done — ^he is equally acceptable whether he has 
been in Sing Sing or at Harvard and we do not even inquire 
from which place he has graduated. All that he needs 
is the desire to work. If he does not desire to work, it 
is very unlikely that he will apply for a position, for it is 


pretty well understood that a man in the Ford plant works. 

We do not, to repeat, care what a man has been. If he 
has gone to college he ought to be able to go ahead faster, 
but he has to start at the bottom and prove his ability. 
Every man's future rests solely with himself. There is 
far too much loose talk about men being unable to obtain 
recognition. With us everj' man is fairly certain to get 
the exact recognition he deserves. 

Of course, there are certain factors in the desire for 
recognition which must be reckoned with. The whole 
modem industrial system has warped the desire so out of 
shape that it is now almost an obsession. There was a time 
when a man's personal advancement depended entirely 
and LDaimediately upK)n his work, and not upon any one's 
favour; but nowadays it often depends far too much upon 
the indi\'iduars good fortune in catching some influential 
eye. That is what we have successfully fought against. 
Men will work with the idea of catching somebody's eye; 
they will work with the idea that if they fail to get credit 
for what they have done, they might as well have done it 
badly or not have done it at all. Thus tbe work some- 
times becomes a secondary consideration. The job in 
hand — the article in hand, the special kind of service in 
hand — turns out to be not the principal job. The main 
work becomes personal advancement — a platform from 
which to catch somebody's eye. This habit of making 
the work secondary' and the recognition primarj' is unfair 
to the work. It makes recognition and credit the real job. 
And this also has an unfortunate effect on the worker. 
It encourages a peculiar kind of ambition which is neither 
lovely nor productive. It produces the kind of man who 
imagines that by "standing in with the boss" he will get 
ahead. Every shop knows this kind of man. And the 
worst of it is there are some things in the present industrial 
system which make it appear that the game really pays. 


Foremen are only human. It is natural that they should 
be flattered by being made to believe that they hold the 
weal or woe of workmen in then' hands. It is natural, 
also, that being open to flattery, their self-seeking subor- 
dinates should flatter them still more to obtain and profit 
by their favour. That is why I want as little as possible 
of the personal element. 

It is particularly easy for any man who never knows it 
all to go forward to a higher position with us. Some men 
will work hard but they do not possess the capacity to think 
and especiaUy to think quickly. Such men get as far as 
their ability deserves. A man may, by his industry, de- 
serve advancement, but it cannot be possibly given him 
imless he also has a certain element of leadership. This 
is not a dream world we are living in. I think that every 
man in the shaking-down process of our factory eventually 
lands about where he belongs. 

We are never satisfied with the way that everything is 
done in any part of the organization; we always think it 
ought to be done better and that eventually it will be done 
better. The spirit of crowding forces the man who has the 
qualities for a higher place eventually to get it. He per- 
haps would not get the place if at any time the organi- 
zation — ^which is a word I do not like to use — became fixed, 
so that there would be routine steps and dead men's shoes. 
But we have so few titles that a man who ought to be doing 
something better than he is doing, very soon gets to doing 
it — ^he is not restrained by the fact that there is no po- 
sition ahead of him "open" — ^for there are no "positions. " 
We have no cut-and-dried places — our best men make their 
places. This is easy enough to do, for there is always 
work, and when you think of getting the work done instead 
of finding a title to fit a man who wants to be promoted, 
then there is no difficulty about promotion. The pro- 
motion itself is not formal; the man simply finds himself 


doing something other than what he was doing and getting 
more money. 

Ah of our people have thus come up from the bottom. 
The head of the factory started as a machinist. The man 
in charge of the big River Rouge plant began as a pattern- 
maker. Another man overseeing one of the principal 
departments started as a sweeper. There is not a single 
man anywhere in the factory who did not simply come in 
off the street. Everything that we have developed has 
been done by men who have qualified themselves with us. 
We fortunately did not inherit any traditions and we are 
not founding any. If we have a tradition it is this : 

Everything can always be done better than it is being 

That pressing always to do work better and faster 
solves nearly every factory problem. A department gets 
its standing on its rate of production. The rate of pro- 
duction and the cost of production are distinct elements. 
The foremen and superintendents would only be wasting 
time were they to keep a check on the costs in their 
departments. There are certain costs — such as the rate 
of wages, the overhead, the price of materials, and the like, 
which they could not in any way control, so they do not 
bother about them. What they can control is the rate 
of production in their own departments. The rating of a 
department is gained by dividing the number of parts 
produced by the number of hands working. Every 
foreman checks his own department daily — ^he carries the 
figures always with him. The superintendent has a 
tabulation of all the scores; if there is something wrong 
in a department the output score shows it at once, the 
superintendent makes inquiries and the foreman looks 
alive. A considerable part of the incentive to better 
methods is directly traceable to this simple rule-of -thumb 
method of rating production. The foreman need not be 


a cost accountant — ^he is no better a foreman for being 
one. His charges are the machines and the human 
beings in his department. When they are working at 
their best he has performed his service. The rate of his 
production is his guide. There is no reason for him to 
scatter his energies over collateral subjects. 

This rating system simply forces a foreman to forget per- 
sonalities — to forget everything other than the work in 
hand. If he should select the people he likes instead of 
the people who can best do the work, his department 
record will quickly show up that fact. 

There is no difficulty in picking out men. They 
pick themselves out because — although one hears a great 
deal about the lack of opportunity for advancement — 
the average workman is more interested in a steady job 
than he is in advancement. Scarcely more than five per 
cent, of those who work for wages, while they have thei 
desire to receive more money, have also the willingness to 
accept the additional responsibility and the additional 
work which goes with the higher places. Only about 
twenty -five per cent, are even willing to be straw bosses, 
and most of them take that position because it carries 
with it more pay than working on a machine. Men of a 
more mechanical turn of mind, but with no desire for 
responsibility, go into the tool-making departments where 
they receive considerably more pay than in production 
proper. But the vast majority of men want to stay put. 
They want to be led. They want to have everything 
done for them and to have no responsibility. Therefore, 
in spite of the great mass of men, the difficulty is not to 
discover men to advance, but men who are willing to be 

The accepted theory is that all people are anxious for 
advancement, and a great many pretty plans have been 
built up from that. I can only say that we do not find that 


to be the case. The Americans in our employ do want to 
go ahead, but they by no means do always want to go 
clear through to the top. The foreigners, generally speak- 
ing, are content to stay as straw bosses. Why all of this 
is, I do not know. I am giving the facts. 

As I have said, everyone in the place reserves an open 
mind as to the way in which every job is being done. If 
there is any fixed theory — any fixed rule — it is that no 
job is being done well enough. The whole factory 
management is always open to suggestion, and we have an 
informal suggestion system by which any workman can 
communicate any idea that comes to him and get action 
on it. 

The saving of a cent per piece may be distinctly worth 
while. A saving of one cent on a part at our present 
rate of production represents twelve thousand dollars 
a year. One cent saved on each part would amount to 
millions a year. Therefore, in comparing savings, the 
calculations are carried out to the thousandth part of a 
cent. If the new way suggested shows a saving and the 
cost of making the change will pay for itself within a 
reasonable time — say within three months — the change is 
made practically as of course. These changes are by no 
means limited to improvements which will increase produc- 
tion or decrease cost. A great many — ^perhaps most of 
them — are in the line of making the work easier. We do 
not want any hard, man-killing work about the place, and 
there is now very little of it. And usually it so works out 
that adopting the way which is easier on the men also 
decreases the cost. There is most intimate connection 
between decency and good business. We also investigate 
down to the last decimal whether it is cheaper to make or 
to buy a part. 

The suggestions come from everywhere. The Polish 
workmen seem to be the cleverest of all of the foreigners 


in making them. One, who could not speak English, 
indicated that if the tool in his machine were set at a 
different angle it might wear longer. As it was it lasted 
only four or jfive cuts. He was right, and a lot of money 
was saved in grinding. Another Pole, running a drill 
press, rigged up a little fixture to save handling the part 
after drilling. That was adopted generally and a consider- 
able saving resulted. The men often try out little attach- 
ments of their own because, concentrating on one thing, 
they can, if they have a mind that way, usually devise some 
improvement. The cleanliness of a man's machine also — 
although cleaning a machine is no part of his duty — ^is us- 
ually an indication of his intelligence. 

Here are some of the suggestions: A proposal that 
castings be taken from the foundry to the machine shop 
on an overhead conveyor saved seventy men in the trans-, 
port division. There used to be seventeen men — and 
this was when production was smaller — taking the burrs 
off gears, and it was a hard, nasty job. A man roughly 
sketched a special machine. His idea was worked out and 
the machine built. Now four men have several times the 
output of the seventeen men — and have no hard work at 
all to do. Changing from a solid to a welded rod in 
one part of the chassis effected an immediate saving of 
about one half million a year on a smaller than the present- 
day production. Making certain tubes out of flat sheets 
instead of drawing them in the usual way effected another 
enormous saving. 

The old method of making a certain gear comprised four 
operations and 12 per cent, of the steel went into scrap. 
We use most of our scrap and eventually we will use it all, 
but that is no reason for not cutting down on scrap — the 
mere fact that all waste is not a dead loss is no excuse for 
permitting waste. One of the workmen devised a very sim- 
ple new method for making this gear in which the scrap was 


only one per cent. Again, the cam shaft has to have heat 
treatment in order to make the surface hard ; the cam shafts 
always came out of the heat-treat oven somewhat warped, 
and even back in 1918, we employed 37 men just to 
straighten the shafts. Several of our men experimented 
for about a year and finally worked out a new form of 
oven in which the shafts could not warp. In 1921, with 
the production much larger than in 1918, we employed 
only eight men in the whole operation. 

And then there is the pressing to take away the necessity 
for skill in any job done by any one. The old-time tool 
hardener was an expert. He had to judge the heating 
temperatures. It was a hit-or-miss operation. The 
wonder is that he hit so often. The heat treatment in 
the hardening of steel is highly important — ^providing one 
knows exactly the right heat to apply. That cannot be 
known by rule-of- thumb. It has to be measured. We 
introduced a system by which the man at the furnace has 
nothing at all to do with the heat. He does not see the 
pyrometer — the instrument which registers the tempera- 
ture. Coloured electric lights give him his signals. 

None of our machines is ever built haphazardly. The 
idea is investigated in detail before a move is made. 
Sometimes wooden models are constructed or again the 
parts are drawn to full size on a blackboard. We are 
not bound by precedent but we leave nothing to luck, 
and we have yet to build a machine that will not do the 
work for which it was designed. About ninety per cent, 
of all experiments have been successful. 

Whatever expertness in fabrication that has developed 
has been due to men. I think that if men are unhampered 
and they know that they are serving, they will always put 
all of mind and will into even the most trivial of tasks. 


The Terror of the Machine 

REPETITIVE labour— the doing of one thing over 
and over again and always in the same way — is a 
■^ terrifying prospect to a certain kind of mind. 
It is terrifying to me. I could not possibly do the same 
thing day in and day out, but to other minds, perhaps I 
might say to the majority of minds, repetitive operations 
hold no terrors. In fact, to some types of mind thought is 
absolutely appalling. To them the ideal job is one where 
the creative instinct need not be expressed. The jobs 
where it is necessary to put in mind as well as muscle have 
very few takers — we always need men who like a job 
because it is difficult. The average worker, I am sorry to 
say, wants a job in which he does not have to put forth 
much physical exertion — above all, he wants a job in which 
he does not have to think. Those who have what might 
be called the creative type of mind and who thoroughly 
abhor monotony are apt to imagine that all other minds 
are similarly restless and therefore to extend quite un- 
wanted sympathy to the labouring man who day in and 
day out performs almost exactly the same operation. 

When you come right down to it, most jobs are re- 
petitive. A business man has a routine that he follows 
with great exactness; the work of a bank president is 
nearly all routine; the work of under officers and clerks 
in a bank is purely routine. Indeed, for most purposes 
and most people, it is necessary to establish something in 
the way of a routine and to make most motions purely 
repetitive — otherwise the individual will not get enough 



done to be able to live off his own exertions. There Is no 
reason why any one with a creative mind should be at a 
monotonous job, for everywhere the need for creative men 
is pressing. There will never be a dearth of places for 
skilled people, but we have to recognize that the will to be 
skilled is not general. And even if the will be present, then 
the courage to go through with the training is absent. 
One cannot become skilled by mere wishing. 

There are far too many assumptions about what 
human nature ought to be and not enough research into 
what it is. Take the assumption that creative work can 
be undertaken only in the realm of vision. We speak of 
creative "artists" in music, painting, and the other arts. 
We seemingly limit the creative functions to productions 
that may be hung on gallery walls, or played in concert 
halls, or otherwise displayed where idle and fastidious 
people gather to admire each other's culture. But if a man 
wants a field for vital creative work, let him come where 
he is dealing with higher laws than those of sound, or line, 
or colour; let him come where he may deal with the laws 
of personality. We want artists in industrial relationship. 
We want masters in industrial method — both from the 
standpoint of the producer and the product. We want 
those who can mould the political, social, industrial, and 
moral mass into a sound and shapely whole. We have 
limited the creative faculty too much and have used it 
for too trivial ends. We want men who can create the 
working design for all that is right and good and desirable 
in our Hfe. Good intentions plus well-thought-out work- 
ing designs can be put into practice and can be made to 
succeed. It is possible to increase the well-being of the 
workingman — ^not by having him do less work, but by 
aiding him to do more. If the world will give its attention 
and interest and energy to the making of plans that will 
profit the other fellow as he is, then such plans can be 


established on a practical working basis. Such plans will 
endure — and they will be far the most profitable both in 
human and financial values. What this generation needs 
is a deep faith, a profound conviction in the practicability 
of righteousness, justice, and humanity in industry. If 
we cannot have these qualities, then we were better off 
without industry. Indeed, if we cannot get those quah 
ities, the days of industry are numbered. But we can get 
them. We are getting them. 

If a man cannot earn his keep without the aid of machin- 
ery, is it benefitting him to withhold that machinery be- 
cause attendance upon it may be monotonous? And let 
him starve.? Or is it better to put him in the way of a 
good living.?^ Is a man the happier for starving .^^ If he is 
the happier for using a machine to less than its capacity, 
is he happier for producing less than he might and con- 
sequently getting less than his share of the world's goods 
in exchange? 

I have not been able to discover that repetitive labour 
injures a man in any way. I have been told by parlour 
experts that repetitive labour is soul- as well*as body- 
destroying, but that has not been the result of our in- 
vestigations. There was one case of a man who all day 
long did little but step on a treadle release. He thought 
that the motion was making him one-sided; the medical 
examination did not show that he had been affected but, 
of course, he was changed to another job that used a 
different set of muscles. In a few weeks he asked for his 
old job again. It would seem reasonable to imagine that 
going tLrough the same set of motions daily for eight 
hours would produce an abnormal body, but we have never 
had a case of it. We shift men whenever they ask to be 
shifted and we should like regularly to change them — ^that 
would be entirely feasible if only the men would have it 
that way. They do not like changes which they do not. 


themselves suggest. Some of the operations are un- 
doubtedly monotonous — so monotonous that it seems 
scarcely possible that any man would care to continue long 
at the same job. Probably the most monotonous task 
in the whole factory is one in which a man picks up a gear 
with a steel hook, shakes it in a vat of oil, then turns it into 
a basket. The motion never varies. The gears come to 
him always in exactly the same place, he gives each one the 
same number of shakes, and he drops it into a basket which 
is always in the same place. No muscular energy is re- 
quired, no intelligence is required. He does little more 
than wave his hands gently to and fro — ^the steel rod is so 
light. Yet the man on that job has been doing it for eight 
sohd years. He has saved and invested his money until 
now he has about forty thousand dollars — ^and he stub- 
bornly resists every attempt to force him into a better job ! 

The most thorough research has not brought out a 
single case of a man's mind being twisted or deadened by 
the work. The kind of mind that does not like repetitive 
work does not have to stay in it. The work in each 
department is classified according to its desirability and 
skill into Classes "A," "B," and *'C," each class having 
5iny where from ten to thirty different operations. A man 
comes directly from the employment office to " Class C. " 
As he gets better he goes into "Class B," and so on into 
"Class A, " and out of *' Class A" into tool making or some 
supervisory capacity. It is up to him to place himself. 
If he stays in production it is because he likes it. 

In a previous chapter I noted that no one applying for 
work is refused on account of physical condition. This 
policy went into effect on January 12, 1914, at the time of 
setting the minimum wage at five dollars a day and the 
working day at eight hours. It carried with it the further 
condition that no one should be discharged on account of 
physical condition, except, of course, in the case of con- 


tagious disease. I think that if an industrial institu- 
tion is to fill its whole role, it ought to be possible foi* 
a cross-section of its employees to show about the same 
proportions as a cross-section of a society in general. 
We have always with us the maimed and the halt. There 
is a most generous disposition to regard all of these people 
who are physically incapacitated for labour as a charge on 
society and to support them by charity. There are cases 
where I imagine that the support must be by charity — as, 
for instance, an idiot. But those cases are extraordinarily 
rare, and we have found it possible, among the great num- 
ber of different tasks that must be performed somewhere 
in the company, to find an opening for almost any one and 
on the basis of production. The blind man or cripple can, 
in the particular place to which he is assigned, perform 
just as much work and receive exactly the same pay as 
a wholly able-bodied man would. We do not prefer 
cripples — ^but we have demonstrated that they can earn 
full wages. 

It would be quite outside the spirit of what we are trying 
to do, to take on men because they were crippled, pay 
them a lower wage, and be content with a lower output. 
That might be directly helping the men but it would not be 
helping them in the best way. The best way is always the 
way by which they can be put on a productive par with 
able-bodied men. I believe that there is very little occasion 
for charity in this world — that is, charity in the sense of 
making gifts. Most certainly business and charity can- 
not be combined ; the purpose of a factory is to produce, and 
it ill serves the community in general unless it does produce 
to the utmost of its capacity. We are too ready to assume 
without investigation that the full possession of faculties 
is a condition requisite to the best performance of all jobs. 
To discover just what was the real situation, I had all of 
the different jobs in the factory classified to the kind of 


machine and work — whether the physical labour involved 
was light, medium, or heavy; whether it were a wet or a 
dry job, and if wet, with what kind of fluid; whether it were 
clean or dirty; near an oven or a furnace; the condition of 
the air; whether one or both hands had to be used; whether 
the employee stood or sat down at his work; whether it was 
noisy or quiet; whether it required accuracy; whether the 
light was natural or artificial; the number of pieces that 
had to be handled per hour; the weight of the material 
handled; and the description of the strain upon the 
worker. It turned out at the time of the inquiry that 
there were then 7,882 different jobs in the factory. Of 
these, 949 were classified as heavy work requiring strong, 
able-bodied, and practically physically perfect men; 
3,338 required men of ordinary physical development and 
strength. The remaining 3,595 jobs were disclosed as 
requiring no physical exertion and could be performed by 
the slightest, weakest sort of men. In fact, most of them 
could be satisfactorily filled by women or older children. 
The lightest jobs were again classified to discover howmany 
of them required the use of full faculties, and we found that 
670 could be filled by legless men, 2,637 by one-legged men, 
2 by armless men, 715 by one-armed men, and 10 by blind 
men. Therefore, out of 7,882 kinds of jobs, 4,034 — 
although some of them required strength — did not require 
full physical capacity. That is, developed industry can pro- 
vide wage work for a higher average of standard men than 
are ordinarily included in any normal community. If the 
jobs in any one industry or, say, any one factory, were 
analyzed as ours have been analyzed, the proportion might 
be very different, yet I am quite sure that if work is suf- 
ficiently subdivided — subdivided to the point of highest 
economy — there will be no dearth of places in which the 
physically incapacitated can do a man's job and get a 
man's wage. It is economically most wasteful to accept 


crippled men as charges and then to teach them trivial 
tasks hke the weaving of baskets or some other form of 
miremunerative hand labour, in the hope, not of aiding 
them to make a living, but of preventing despondency. 

When a man is taken on by the Employment Depart- 
ment, the theory is to put him into a job suited to his 
condition. If he is already at work and he does not seem 
able to perform the work, or if he does not like his work, 
he is given a transfer card, which he takes up to the transfer 
department, and after an examination he is tried out in some 
other work more suited to his condition or disposition. 
Those who are below the ordinary physical standards are 
just as good workers, rightly placed, as those who are 
above. For instance, a blind man was assigned to the stock 
department to count bolts and nuts for shipment to branch 
establishments. Two other able-bodied men were already 
employed on this work. In two days the foreman sent a 
note to the transfer department releasing the able-bodied 
men because the blind man was able to do not only his own 
work but also the work that had formerly been done by 
the sound men. 

This salvage can be carried further. It is usually 
taken for granted that when a man is injured he is simply 
out of the running and should be paid an allowance. 
But there is always a period of convalescence, especially in 
fracture cases, where the man is strong enough to work, 
and, indeed, by that time usually anxious to work, for 
the largest possible accident allowance can never be as 
great as a man's wage. If it were, then a business would 
simply have an additional tax put upon it, and that tax 
would show up in the cost of the product. There would 
be less buying of the product and therefore less work for 
somebody. That is an inevitable sequence that must al- 
ways be borne in mind. 

We have experimented with bedridden men — men who 


were able to sit up. We put black oilcloth covers or 
aprons over the beds and set the men to work screwing 
nuts on small bolts. This is a job that has to be done by 
hand and on which fifteen or twenty men are kept busy 
in the Magneto Department. The men in the hospital 
could do it just as well as the men in tlie shop and they 
were able to receive their regular wages. In fact, their 
production was about 20 per cent., I believe, above the 
usual shop production. No man had to do the work 
unless he wanted to. But they all wanted to. It kept 
time from hanging on their hands. They slept and ate 
better and recovered more rapidly. 

No particular consideration has to be given to deaf-and- 
dumb employees. They do their work one hundred per 
cent. The tubercular employees — and there are usually 
about a thousand of them — mostly work in the material 
salvage department. Those cases which are considered 
contagious work together in an especially constructed 
shed. The work of all of them is largely out of doors. 

At the time of the last analysis of employed, there were 
9,563 sub-standard men. Of these, 123 had crippled or 
amputated arms, forearms, or hands. One had both 
hands off. There were 4 totally blind men, 207 blind in 
one eye, 253 with one eye nearly blind, 37 deaf and dumb, 
60 epileptics, 4 with both legs or feet missing, 234 with one 
foot or leg missing. The others had minor impediments. 

The length of time required to become proficient in the 
various occupations is about as follows: 43 per cent, of all 
the jobs require not over one day of training; 36 per cent, 
require from one day to one week; 6 per cent, require from 
one to two weeks; 14 per cent, require from one month to 
one year; one per cent, require from one to six years. The 
last jobs require great skill — as in tool making and die 

The discipline throughout the plant is rigid. There are 


no petty rules, and no rules the justice of which can 
reasonably be disputed. The injustice of arbitrary dis- 
charge is avoided by confining the right of discharge to the 
employment manager, and he rarely exercises it. The 
year 1919 is the last on which statistics were kept. In 
that year 30,155 changes occurred. Of those 10,334 were 
absent more than ten days without notice and therefore 
dropped. Because they refused the job assigned or, 
without giving cause, demanded a transfer, 3,702 were let 
go. A refusal to learn English in the school provided 
accounted for 38 more; 108 enlisted; about 3,000 were 
transferred to other plants. Going home, going into 
farming or business accounted for about the same number. 
Eighty-two women were discharged because their hus- 
bands were working — we do not employ married women 
whose husbands have jobs. Out of the whole lot only 80 
were flatly discharged and the causes were: Misrep- 
resentation, 56; by order of Educational Department, 20; 
and undesirable, 4. 

We expect the men to do what they are told. The 
organization is so highly specialized and one part is so 
dependent upon another that we could not for a moment 
consider allowing men to have their own way. Without 
the most rigid discipline we would have the utmost 
confusion. I think it should not be otherwise in industry. 
The men are there to get the greatest possible amount of 
work done and to receive the highest possible pay. If each 
man were permitted to act in his own way, production 
would suffer and therefore pay would suffer. Any one who 
does not like to work in our way may always leave. The 
company's conduct toward tlie men is meant to be exact 
and impartial. It is naturally to the interest both of the 
foremen and of the department heads that the releases 
from their departments should be few. The workman has 
a full chance to tell his story if he has been unjustly treated — 


he has full recourse. Of course, it is inevntable that 
injustices occur. Men are not always fair with their 
fellow workmen. Defective human nature obstructs our 
good intentions now and then. The foreman does not 
always get the idea, or misapplies it — but the company's 
intentions are as I have stated, and we use every means to 
have them understood. 

It is necessar\' to be most insistent in the matter of 
absences. A man may not come or go as he pleases; he may 
always apply for leave to the foreman, but if he leaves 
without notice, then, on his return, the reasons for his 
absence are carefully investigated and are sometimes 
referred to the Medical Department. If his reasons are 
good, he is permitted to resume work. If they are not 
good he may be discharged. In hiring a man the only 
data taken concerns his name, his address, his age, 
whether he is married or single, the number of his de- 
pendents, whether he has ever worked for the Ford 
Motor Company, and the condition of his sight and his 
hearing. No questions are asked concerning what the 
man has pre\'iously done, but we have what we call the 
"Better Advantage Notice,*' by which a man who has had 
a trade before he came to us files a notice with the employ- 
ment department stating what the trade was. In this way, 
when we need specialists of any kind, we can get them right 
out of production. This is also one of the avenues by 
which tool makers and moulders quickly reach the higher 
positions. I once wanted a Swiss watch maker. The 
cards turned one up — he was running a drill press. The 
Heat Treat department wanted a skilled firebrick layer. 
He also was found on a drill press — ^he is now a general 

There is not much personal contact — the men do their 
work and go home — a factory is not a drawing room. 
But we try to have justice and, while there may be little 


in the way of hand shaking — we have no professional 
hand shakers — also we try to prevent opportunity for 
petty personahties. We have so many departments that 
the place is almost a world in itself — every kind of man 
can find a place somewhere in it. Take fighting between 
men. Men will fight, and usually fighting is a cause for 
discharge on the spot. We find that does not help the 
fighters — it merely gets them out of our sight. So the 
foremen have become rather ingenious in devising pun- 
ishments that will not take anything away from the man's 
family and which require no time at all to administer. 

One point that is absolutely essential to high capacity, 
as well as to humane production, is a clean, well-lighted 
and well-ventilated factory. Our machines are placed 
very close together — every foot of floor space in the fac- 
tory carries, of course, the same overhead charge. The 
consumer must pay the extra overhead and the extra 
transportation involved in having machines even six inches 
farther apart than they have to be. We measure on each 
job the exact amoimt of room that a man needs; he must 
not be cramped — that would be waste. But if he and his 
machine occupy more space than is required, that also is 
waste. This brings our machines closer together than in 
probably any other factory in the world. To a stranger 
they may seem piled right on top of one another, but they 
arc scientifically arranged, not only in the sequence of 
operations, but to give every man and every machine every 
square inch that he requires and, if possible, not a square 
inch, and certainly not a square foot, more than he requires. 
Our factory buildings are not intended to be used as 
parks. The close placing requires a maximum of safe- 
guards and ventilation. 

Machine safeguarding is a subject all of itself. We do 
not consider any machine — no matter how eflSciently it 
may turn out its work — as a proper machine unless it is 


absolutely safe. We have no machines that we consider 
unsafe, but even at that a few accidents will happen. 
Every accident, no matter how trivial, is traced back by a 
skilled man employed solely for that purpose, and a study 
is made of the machine to make that same accident in the 
future impossible. 

When we put up the older buildings, we did not under- 
stand so much about ventilation as we do to-day. In all 
the later buildings, the supporting columns are made 
hollow and through them the bad air is pumped out and 
the good air introduced. A nearly even temperature is 
kept everywhere the year round and, during daylight, 
there is nowhere the necessity for artificial light. Some- 
thing like seven hundred men are detailed exclusively to 
keeping the shops clean, the windows washed, and all of 
the paint fresh. The dark corners which invite expectora- 
tion are painted white. One cannot have morale without 
cleanliness. We tolerate makeshift cleanliness no more 
than makeshift methods. 

' No reason exists why factory work should be dangerous. 
If a man has worked too hard or through too long hours 
he gets into a mental state that invites accidents. Part of 
the work of preventing accidents is to avoid this mental 
state; part is to prevent carelessness, and part is to make 
machinery absolutely fool-proof. The principal causes of 
accidents as they are grouped by the experts are : 

(1) Defective structures; (2) defective machines; 
(3) insufficient room; (4) absence of safeguards; (5) 
unclean conditions; (6) bad lights; (7) bad air; (8) 
unsuitable clothing; (9) carelessness; (10) ignorance; 
(11) mental condition; (12) lack of cooperation. 

The questions of defective structures, defective machin- 
ery, insufficient room, unclean conditions, bad light, 
bad air, the wrong mental condition, and the lack of 
cooperation are easily disposed of. None of the men work 


too hard. The wages settle nine tenths of the mental 
problems and construction gets rid of the others. We have 
then to guard against unsuitable clothing, carelessness, 
and ignorance, and to make everything we have fool-proof. 
This is more difficult where we have belts. In all of our new 
construction, each machine has its individual electric motor, 
but in the older construction we had to use belts. Every 
belt is guarded. Over the automatic conveyors are 
placed bridges so that no man has to cross at a dangerous 
point. Wherever there is a possibility of flying metal, the 
workman is required to wear goggles and the chances are 
further reduced by currounding the machine with netting. 
Around hot furnaces we have railings. There is nowhere 
an open part of a machine in which clothing can be caught. 
All the aisles are kept clear. The starting switches of 
draw presses are protected by big red tags which have to 
be removed before the switch can be turned — ^this pre- 
vents the machine being started thoughtlessly. Workmen 
will wear unsuitable clothing — ties that may be caught in 
a pulley, flowing sleeves, and all manner of unsuitable 
articles. The bosses have to watch for that, and they 
catch most of the offenders. New machines are tested in 
every way before they are permitted to be installed. As 
a result we have practically no serious accidents. 
Industry needs not exact a human toll. 



THERE is nothing to running a business by custom 
— ^to saying: "I pay the going rate of wages." 
The same man would not so easily say: "I have 
nothing better or cheaper to sell than any one has.'* 
No manufacturer in his right mind would contend that 
buying only the cheapest materials is the way to make 
certain of manufacturing the best article. Then why do 
we hear so much talk about the "liquidation of labour " and 
the benefits that will flow to the country from cutting wages 
— ^which means only the cutting of buying power and the 
curtailing of the home market.'' What good is industry if 
it be so unskillfully managed as not to return a living to 
everyone concerned .f' No question is more important 
than that of wages — ^most of the people of the country live 
on wages. The scale of their living — ^the rate of theii 
wages — determines the prosperity of the country. 

Throughout all the Ford industries we now have a 
minimum wage of six dollars a day; we used to have a 
minimum of five dollars; before that we paid whatever it 
was necessary to pay. It would be bad morals to go back 
to the old market rate of paying — ^but also it would be the 
worst sort of bad business. 

First get at the relationships. It is not usual to speak 
of an employee as a partner, and yet what else is he? 
Whenever a man finds the management of a business too 
much for his own time or strength, he calls in assistants to 
share the management with him. Why, then, if a man 
finds the production part of a business too much for his 



own two hands should he deny the title of "partner" 
to those who come in and help him produce? Every 
business that employs more than one man is a kind of 
partnership. The moment a man calls for assistance in 
his business — even though the assistant be but a boy — 
that moment he has taken a partner. He may himself 
be sole owner of the resources of the business and sole 
director of its operations, but only while he remains sole 
manager and sole producer can he claim complete in- 
dependence. No man is independent as long as he has to 
depend on another man to help him. It is a reciprocal 
relation — ^the boss is the partner of his worker, the worker 
is partner of his boss. And such being the case, it is use- 
less for one group or the other to assume that it is the one 
indispensable unit. Both are indispensable. The one 
can become unduly assertive only at the expense of the 
other — and eventually at its own expense as well. It is ut- 
terly foolish for Capital or for Labour to think of themselves 
as groups. They are partners. When they pull and haul 
against each other — ^they simply injure the organization 
in which they are partners and from which both draw 

It ought to be the employer's ambition, as leader, 
to pay better wages than any similar line of business, and it 
ought to be the workman's ambition to make this possible. 
Of course there are men in all shops who seem to believe 
that if they do their best, it will be only for the employer's 
benefit — and not at all for their own. It is a pity that 
such a feeling should exist. But it does exist and perhaps 
it has some justification. If an employer urges men to do 
their best, and the men learn after a while that their best 
does not bring any reward, then they naturally drop back 
into "getting by." But if they see the fruits of hard 
work in their pay envelope — ^proof that harder work means 
higher pay — ^then also they begin to learn that they are a 


part of the business, and that its success depends on them 
and their success depends on it. 

"What ought the employer to pay?" — ^**What ought 
the employee to receive? " These are but minor questions. 
The basic question is "What can the business stand?'* 
Certainly ro business can stand outgo that exceeds its 
income. When you pump water out of a well at a faster 
rate than the water flows in, the well goes dry. And when 
the well runs dry, those who depend on it go thirsty. And 
if, perchance, they imagine they can pump one well dry 
and then jump to some other well, it is only a matter of 
time when all the wells will be dry. There is now a wide- 
spread demand for more justly divided rewards, but it 
must be recognized that there are limits to rewards. The 
business itself sets the limits. You cannot distribute 
$150,000 out of a business that brings in only $100,000. 
The business limits the wages, but does anything limit the 
business? The business limits itself by following bad pre- 

If men, instead of saying "the employer ought to do 
thus-and-so," would say, "the business ought to be so 
stimulated and managed that it can do thus-and-so," 
they would get somewhere. Because only the business 
can pay wages. Certainly the employer cannot, unless 
the business warrants. But if that business does warrant 
higher wages and the employer refuses, what is to be done? 
As a rule a business means the livelihood of too many men, 
to be tampered with. It is criminal to assassinate a busi- 
ness to which large numbers of men have given their 
labours and to which they have learned to look as their field 
of usefulness and their source of livelihood. Killing the 
business by a strike or a lockout does not help. The em- 
ployer can gain nothing by looking over the employees and 
asking himself, "How little can I get them to take?" 
Nor the employee by glaring back and asking, "How 

WAGES 119 

much can I force him to give?" Eventually both will 
have to turn to the business and ask, *'How can this 
industry be made safe and profitable, so that it will be 
able to provide a sure and comfortable living for all of us?" 

But by no means all employers or all employees will 
think straight. The habit of acting shortsightedly is a 
hard one to break. What can be done? Nothing. No 
rules or laws will effect the changes. But enlightened 
self-interest will. It takes a little while for enlighten- 
ment to spread. But spread it must, for the concern in 
which both employer and employees work to the same end 
of service is bound to forge ahead in business. 

What do we mean by high wages, anyway? 

We mean a higher wage than was paid ten months or 
ten years ago. We do not mean a higher wage than ought 
to be paid. Our high wages of to-day may be low wages 
ten years from now. 

If it is right for the manager of a business to try to make 
it pay larger dividends, it is quite as right that he should 
try to make it pay higher wages. But it is not the 
manager of the business who pays the high wages. Of 
course, if he can and will not, then the blame is on him. 
But he alone can never make high wages possible. High 
wages cannot be paid unless the workmen earn them. 
Their labour is the productive factor. It is not the only 
productive factor — ^poor management can waste labour and 
material and nullify the efforts of labour. Labour can 
nullify the results of good management. But in a partner- 
ship of skilled management and honest labour, it is the 
Workman who makes high wages possible. He invests his 
energy and skill, and if he makes an honest, whole- 
hearted investment, high wages ought to be his reward. 
Not only has he earned them, but he has had a big part in 
creating them. 

It ought to be clear, however, that the high wage begins 


down in the shop. If it is not created there it cannot 
get into pay envelopes. There will never be a system 
invented which will do away with the necessity of work. 
Nature has seen to that. Idle hands and minds were 
never intended for any one of us. Work is our sanity, 
our self-respect, our salvation. So far from being a curse, 
work is the greatest blessing. Exact social justice flows 
only out of honest work. The man who contributes 
much should take away much. Therefore no element of 
charity is present in the paying of wages. The kind of 
workman who gives the business the best that is in him 
is the best kind of workman a business can have. And he 
cannot be expected to do this indefinitely without proper 
recognition of his contribution. The man who comes 
to the day's job feeling that no matter how much he may 
give, it will not yield him enough of a return to keep him 
beyond want, is not in shape to do his day's work. He is 
anxious and worried, and it all reacts to the detriment of his 

But if a man feels that his day's work is not only 
supplying his basic need, but is also giving him a margin 
of comfort and enabling him to give his boys and girls 
their opportunity and his wife some pleasure in life, then 
his job looks good to him and he is free to give it of his 
best. This is a good thing for him and a good thing for 
the business. The man who does not get a certain satisfac- 
tion out of his day's work is losing the best part of his pay. 

For the day's work is a great thing — a very great thing! 
It is at the very foundation of the world; it is the basis 
of our self-respect. And the employer ought constantly 
to put in a harder day's work than any of his men. 
The employer who is seriously trying to do his duty 
in the world must be a hard worker. He cannot say, 
*'I have so many thousand men working for me." The 
fact of the matter is that sn many thousand men have hin^' 

WAGES 121 

working for them — and the better they work the busier 
they keep him disposing of their products. Wages and 
salaries are in fixed amounts, and this must be so, in order 
to have a basis to figure on. Wages and salaries are a sort 
of profit-sharing fixed in advance, but it often happens 
that when the business of the year is closed, it is discovered 
that more can be paid. And then more ought to be paid. 
When we are all in the business working together, we all 
ought to have some share in the profits — by way of a good 
wage, or salary, or added compensation. And that is be- 
ginning now quite generally to be recognized. 

There is now a definite demand that the human side of 
business be elevated to a position of equal importance 
with the material side. And that is going to come about. 
It is just a question whether it is going to be brought about 
wisely — in a way that will conserve the material side which' 
now sustains us, or unwisely and in such a way as shall 
take from us all the benefit of the work of the past years. 
Business represents our national livelihood, it reflects our 
economic progress, and gives us our place among other 
nations. We do not want to jeopardize that. What we 
want is a better recognition of the human element in busi- 
ness. And surely it can be achieved without dislocation, 
without loss to any one, indeed with an increase of benefit 
to every human being. And the secret of it all is in a rec- 
ognition of human partnership. Until each man is abso- 
lutely sufficient unto himself, needing the services of 
no other human being in any capacity whatever, we shall 
never get beyond the need of partnership. 

Such are the fundamental truths of wages. They are 
partnership distributions. 

When can a wage be considered adequate? How much 
of a hving is reasonably to be expected from work? Have 
you ever considered what a wage does or ought to do? 
To say that it should pay the cost of Hving is to say almost 


nothing. The cost of hving depends largely upon the 
efficiency of production and transportation ; and the effi- 
ciency of these is the sum of the efficiencies of the manage- 
ment and the workers. Good work, well managed, ought 
to result in high wages and low hving costs. If we at- 
tempt to regulate wages on living costs, we get nowhere. 
The cost of hving is a result and we cannot expect to keep 
a result constant if we keep altering the factors which pro- 
duce the result. When we try to regulate wages accord- 
ing to the cost of hving, we are imitating a dog chasing 
his tail. And, anyhow, who is competent to say just what 
kind of hving we shall base the costs on? Let us broaden 
our view and see what a wage is to the workmen — and 
what it ought to be. 

The wage carries all the worker's obhgations outside 
the shop; it carries all that is necessary in the way of 
service and management inside the shop. The day's 
productive work is the most valuable mine of wealth that 
has ever been opened. Certainly it ought to bear not 
less than all the worker's outside obhgations. And cer- 
tainly it ought to be made to take care of the worker's 
sunset days when labour is no longer possible to him — and 
should be no longer necessary. And if it is made to do 
even these, industry will have to be adjusted to a schedule 
of production, distribution, and reward, which will stop 
the leaks into the pockets of men w ho do not assist in pro- 
duction. In order to create a system W'hich shaU be as in- 
dependent of the good-will of benevolent employers as of 
the ill-will of selfish ones, we shall have to find a basis in 
the actual facts of hfe itself. 

It costs just as much physical strength to turn out a 
day's work when wheat is $1 a bushel, as when wheat is 
$2.50 a bushel. Eggs may be 12 cents a dozen or 90 cents 
a dozen. What difference does it make in the units of 
energ>" a man uses in a productive day's work.^^ 

WAGES 12a 

If only the man himself were concerned, the cost of his 
maintenance and the profit he ought to have would be a' 
simple matter. But he is not just an individual. He is a 
citizen, contributing to the welfare of the nation. He is 
a householder. He is perhaps a father with children who 
must be reared to usefuhiess on what he is able to earn 
We must reckon with aU these facts. How are you going 
to figure the contribution of the home to the day's work? 
You pay the man for his work, but how much does that 
work owe to his home? How much to his position as a 
citizen? How much to his position as a father? The man 
does the work in the shop, but his wife does the work in 
the home. The shop must pay them both. On what sys- 
tem of figuring is the home going to find its place on the 
cost sheets of the day's work.? Is the man's own liveli- 
hood to be regarded as the "cost".? And is his ability to 
have a home and family the "profit ".? Is the profit on a 
day's work to be computed on a cash basis only, measured 
by the amount a man has left over after his own and his 
family's wants are all supplied.? Or are all these rela- 
tionships to be considered strictly under head of cost, and 
the profit to be computed entirely outside of them.? 
That IS, after having supported himself and family, clothed 
them, housed them, educated them, given them the privi- 
leges incident to their standard of living, ought there to 
be provision made for still something more in the way of 
savings profit.? And are all properly chargeable to the 
day's work.? I think they are. Otherwise, we have the 
hideous prospect of Httle chHdren and their mothers being 
forced out to work. 

These are questions which call for accurate observation 
and computation. Perhaps there is no one item con- 
nected with our economic life that would surprise us more 
than a knowledge of just what burdens the day's work 


It is perhaps possible accurately to determine — albeit 
with considerable interference with the day's work itself 
— ^how much energy the day's work takes out of a man. 
But it is not at all possible accurately to determine how 
much it will require to put back that energy into him 
against the next day's demands. Nor is it possible to de- 
termine how much of that expended energy he will never be 
able to get back at all. Economics has never yet devised 
a sinking fund for the replacement of the strength of a 
worker. It is possible to set up a kind of sinking fund in 
the form of old-age pensions. But pensions do not attend 
to the profit which each day's labour ought to yield in order 
to take care of all of life's overhead, of all physical losses, 
and of the inevitable deterioration of the manual worker. 

The best wages that have up to date ever been paid are 
not nearly as high as they ought to be. Business is not 
yet sufficiently well organized and its objectives are not 
yet sufficiently clear to make it possible to pay more than 
a fraction of the wages that ought to be paid. That is 
part of the work we have before us. It does not help 
toward a solution to talk about abolishing the wage system 
and substituting communal ownership. The wage system 
is the only one that we have, under which contributions to 
production can be rewarded according to their worth. 
Take away the wage measure and we shall have universal 
injustice. Perfect the system and we may have universal 

I have learned through the years a good deal about 
wages. I believe in the first place that, all other con- 
siderations aside, our own sales depend in a measure upon 
the wages we pay. If we can distribute high wages, then 
that money is going to be spent and it will serve to make 
storekeepers and distributors and manufacturers and 
workers in other lines more prosperous and their prosper- 
ity will be reflected in our sales. Country-wide high 

WAGES 12^ 

wages spell country-wide prosperity, provided, however, 
the higher wages are paid for higher production. Paying 
high wages and lowering production is starting down the 
incline toward dull business. 

It took us some time to get our bearings on wages, and 
it was not until we had gone thoroughly into production 
on "Model T," that it was possible to figure out what 
wages ought to be. Before then we had had some profit 
sharing. We had at the end of each year, for some years 
past, divided a percentage of our earnings with the em- 
ployees. For instance, as long ago as 1909 we distributed 
eighty thousand dollars on the basis of years of service. 
A one-year man received 5 per cent, of his year's wages; 
a two-year man, 7 J per cent., and a three-year man, 10 
per cent. The objection to that plan was that it had 
no direct connection with the day's work. A man did 
not get his share until long after his work was done 
and then it came to him almost in the way of a pres- 
ent. It is always unfortunate to have wages tinged with 

And then, too, the wages were not scientifically adjusted 
to the jobs. The man in job "A" might get one rate and 
the man in job "B" a higher rate, while as a matter of 
fact job "A" might require more skill or exertion than job 
"B." A great deal of inequity creeps into wage rates un- 
less both the employer and the employee know that the 
rate paid has been arrived at by something better than a 
guess. Therefore, starting about 1913 we had time 
studies made of all the thousands of operations in the shops. 
By a time study it is possible theoretically to determine 
what a man's output should be. Then, making large 
allowances, it is further possible to get at a satisfactory 
standard output for a day, and, taking into consideration 
the skill, to arrive at a rate which will express with fair 
accuracy the amount of skill and exertion that goes intq 


a job — and how much is to be expected from the man in 
'the job in return for the wage. Without scientific study 
the employer does not know wliy he is paying a wage and 
the worker does not know why he is getting it. On the 
time figures all of the jobs in our factory were standardized 
and rates set. 

We do not have piece work. Some of the men are 
paid by the day and some are paid by the hour, but in 
practically every case there is a required standard output 
below which a man is not expected to fall. Were it 
otherwise, neither the workman nor ourselves would know 
whether or not wages were being earned. There must be 
a fixed day's work before a real wage can be paid. Watch- 
men are paid for presence. Workmen are paid for work. 

Having these facts in hand we announced and put into 
operation in January, 1914, a kind of profit-sharing plan 
in which the minimum wage for any class of work and 
under certain conditions was five dollars a day. At the 
same time we reduced the working day to eight hours — it 
had been nine — and the week to forty-eight hours. This 
was entirely a voluntary act. All of our wage rates have 
been voluntary. It was to our way of thinking an act of 
social justice, and in the last analysis we did it for our own 
satisfaction of mind. There is a pleasure in feeling that 
you have made others happy — that you have lessened 
in some degree the burdens of your fellow-men — that you 
have provided a margin out of which may be had pleasure 
and saving. Good-will is one of the few really important 
assets of life. A determined man can win almost any- 
thing that he goes after, but unless, in his getting, he 
gains good will he has not profited much. 

There was, however, no charity in any way involved. 
That was not generally understood. Many employers 
thought we were just making the announcement because 
we were prosperous and wanted advertising and they 



M E 


"i S 

S a. 

K S2 2 

WAGES 127 

condemned us because we were upsetting standards — ■ 
violating the custom of paying a man the smallest amount 
he would take. There is nothing to such standards and 
customs. They have to be wiped out. Some day they 
will be. Otherwise, we cannot abolish poverty. We made 
the change not merely because we wanted to pay higher 
wages and thought we could pay them. We wanted to pay 
these wages so that the business would be on a lasting 
foundation. We were not distributing anything — we were 
building for the future. A low wage business is always in- 

Probably few industrial announcements have created 
a more world-wide comment than did this one, and hardly 
any one got the facts quite right. Workmen quite 
generally believed that they were going to get five dollars 
a day, regardless of what work they did. 

The facts were somewhat different from the general 
impression. The plan was to distribute profits, but in- 
stead of waiting until the profits had been earned — to 
approximate them in advance and to add them, under 
certain conditions, to the wages of those persons who had 
been in the employ of the company for six months or more. 
It was classified participation among three classes of 
employees : 

(1) Married men living with and taking good care of 
their families. 

(2) Single men over twenty-two years of age who are 
of proved thrifty habits. 

(3) Young men under twenty-two years of age, and 
women who are the sole support of some next of kin. 

A man was first to be paid his just wages — which were 
then on an average of about fifteen per cent, above the 
usual market wage. He was then eligible to a certain 
profit. His wages plus his profit were calculated to give 
a minimum daily income of five dollars. The profit^ 


sharing rate was divided on an hour basis and was credited 
to the hourly wage rate, so as to give those receiving the 
lowest hourly rate the largest proportion of profits. It was 
paid every two weeks with the wages. For example, a man 
who received thirty -four cents an hour had a profit rate of 
twenty-eight and one half cents an hour — which would 
give him a daily income of five dollars. A man receiving 
fifty-four cents an hour would have a profit rate of twenty-* 
one cents an hour — which would give him a daily income 
of six dollars. 

It was a sort of prosperity-sharing plan. But on 
conditions. The man and his home had to come up to 
certain standards of cleanliness and citizenship. Nothing 
paternal was intended! — a certain amount of paternalism 
did develop, and that is one reason why the whole plan and 
the social welfare department were readjusted. But in 
the beginning the idea was that there should be a very 
definite incentive to better living and that the very best 
incentive was a money premium on proper living. A man 
who is living aright will do his work aright. And then, too, 
we wanted to avoid the possibility of lowering the standard 
of work through an increased wage. It was demonstrated 
in war time that too quickly increasing a man's pay 
sometimes increases only his cupidity and therefore 
decreases his earning power. If, in the beginning, we had 
simply put the increase in the pay envelopes, then very 
likely the work standards would have broken down. The 
pay of about half the men was doubled in the new plan; 
it might have been taken as "easy money. " The thought 
of easy money breaks down work. There is a danger 
in too rapidly raising the pay of any man — whether he 
previously received one dollar or one hundred dollars a 
day. In fact, if the salary of a hundred-dollar-a-day 
man were increased overnight to three hundred dollars 
a day he would probably make a bigger fool of himself 

WAGES 129 

than the working man whose pay is increased from one 
dollar to three dollars an horn*. The man with the larger 
amount of money has larger opportmiity to make a fool of 

In this first plan the standards insisted upon were not 
petty — although sometimes they may have been ad- 
ministered in a petty fashion. We had about fifty 
investigators in the Social Department; the standard of 
common sense among them was very high indeed, but it is 
impossible to assemble fifty men equally endowed with 
common sense. They erred at times — one always hears 
about the errors. It was expected that in order to receive 
the bonus married men should live with and take proper 
care of their families. We had to break up the evil 
custom among many of the foreign workers of taking in 
boarders — of regarding their homes as something to make 
money out of rather than as a place to five in. Boys under 
eighteen received a bonus if they supported the next of kin. 
Single men who lived wholesomely shared. The best 
evidence that the plan was essentially beneficial is the 
record. When the plan went into effect, 60 per cent, of the 
workers immediately qualified to share; at the end of six 
months 78 per cent, were sharing, and at the end of one 
year 87 per cent. Within a year and one half only a 
fraction of one per cent, failed to share. 

The large wage had other results. In 1914, when the 
first plan went into effect, we had 14,000 employees and it 
had been necessary to hire at the rate of about 53,000 a 
year in order to keep a constant force of 14,000. In 1915 
we had to hire only 6,508 men and the majority of these 
new men were taken on because of the growth of the 
business. With the old turnover of labour and our present 
force we should have to hire at the rate of nearly 200,000 
men a year — which would be pretty nearly an impossible 
proposition. Even with the minimum of instruction that 


is required to master almost any job in our place, we rannot 
take on a new staff each morning, or each week, or each 
month; for, although a man may qualify for acceptable 
work at an acceptable rate of speed within two or three 
days, he will be able to do more after a year's experience 
than he did at the beginning. The matter of labour 
turnover has not since bothered us; it is rather hard to 
give exact figures because when we are not running to 
capacity, we rotate some of the men in order to distribute 
the work among greatest number. This makes it hard 
to distinguish between the voluntary and involuntary 
exits. To-day we keep no figures; we now think so little 
of our turnover that we do not bother to keep records. 
As far as we know the turnover is somewhere between 
S per cent, and 6 per cent, a month. 

We have made changes in the system, but we have not 
deviated from this principle: 

If you expect a man to give his time and energy, fix 
his wages so that he will have no financial worries. It 
pays. Our profits, after paying good wages and a 
bonus — which bonus used to run around ten millions a 
year before we changed the system — show that paying 
good wages is the most profitable way of doing business. 

There were objections to the bonus-on-conduct method 
of paying wages. It tended toward paternalism. Pa- 
ternalism has no place in industry. Welfare work that 
consists in prying into employees' private concerns is 
out of date. Men need counsel and men need help, 
oftentimes special help ; and all this ought to be rendered 
for decency's sake. But the broad workable plan of 
investment and participation will do more to solidify 
industry and strengthen organization than will any social 
work on the outside. 

Without changing the principle we have changed the 
method of payment. 


Why Not Always Have Good Business? 

THE employer has to live by the year. The work- 
man has to live by the year. But both of them, 
as a rule, work by the week. They get an order 
or a job when they can and at the price they can. During 
what is called a prosperous time, orders and jobs are 
plentiful. During a *'dull" season they are scarce. 
Business is always either feasting or fasting and is always 
either *'good" or '*bad. " Although there is never a time 
when everyone has too much of this world's goods — ^when 
everyone is too comfortable or too happy — there come 
periods when we have the astounding spectacle of a 
world hungry for goods and an industrial machine hungry 
for work and the two — the demand and the means 
of satisfying it — held apart by a money barrier. Both 
manufacturing and employment are in-and-out affairs. 
Instead of a steady progression we go ahead by fits 
and starts — now going too fast, now stopping alto- 
gether. When a great many people want to buy, there 
is said to be a shortage of goods. When nobody wants 
to buy, there is said to be an overproduction of goods. 
I know that we have always had a shortage of goods, 
but I do not believe we have ever had an over- 
production. We may have, at a particular time, too 
much of the wrong kind of goods. That is not over- 
production — that is merely headless production. We 
may also have great stocks of goods at too high prices. 
That is not overproduction — it is either bad manufactm- 
ing or bad financing. Is business good or bad according 

' 181 


to the dictates of fate? Must we accept the conditions 
as inevitable? Business is good or bad as we make it so. 
The only reason for growing crops, for mining, or for 
manufacturing, is that people may eat, keep warm, have 
clothing to wear, and articles to use. There is no other 
possible reason, yet that reason is forced into the back- 
ground and instead we have operations carried on, not to 
the end of service, but to the end of making money — and 
this because we have evolved a system of money thai 
instead of being a convenient medium of exchange, is at 
times a barrier to exchange. Of this more later. 

We suffer frequent periods of so-called bad luck only 
because we manage so badly. If we had a vast crop 
failure, I can imagine the country going hungry, but I 
cannot conceive how it is that we tolerate hunger and 
poverty, when they grow solely out of bad management, 
and especially out of the bad management that is im- 
plicit in an unreasoned financial structure. Of course 
the war upset affairs in this country. It upset the whole 
world. There would have been no war had management 
been better. But the war alone is not to blame. The war 
showed up a great number of the defects of the financial 
system, but more than anything else it showed how in- 
secure is business supported only by a money foundation. 
I do not know whether bad business is the result of bad 
financial methods or whether the WTong motive in business 
created bad financial methods, but I do know that, while 
it would be wholly undesirable to try to overturn the 
present financial system, it is wholly desirable to reshape 
business on the basis of service. Then a better financial 
system will have to come. The present system will drop 
out because it will have no reason for being. The process 
will have to be a gradual one. 

The start toward the stabilization of his own affairs may 
be made by any one. One cannot achieve perfect results 


acting alone, but as the example begins to sink in there 
will be followers, and thus in the course of time we can 
hope to put inflated business and its fellow, depressed 
business, into a class with small-pox — that is, into the class 
of preventable diseases. It is perfectly possible, with the 
reorganization of business and finance that is bound to 
come about, to take the ill effect of seasons, if not the 
seasons, out of industry, and also the periodic depressions. 
Farming is already in process of reorganization. WTien 
industry and farming are fully reorganized they will be 
complementary; they belong together, not apart. As an 
indication, take our valve plant. We established it 
eighteen miles out in the country so that the workers could 
also be farmers. By the use of machinery farming need 
not consume more than a fraction of the time it now con- 
sumes ; the time nature requires to produce is much larger 
than that required for the human contribution of seeding, 
cultivating, and harvesting; in many industries where the 
parts are not bulky it does not make much difference where 
they are made. By the aid of water power they can well be 
made out in farming country. Thus we can, to a much 
larger degree than is commonly known, have farmer-in- 
dustrialists who both farm and work under the most 
scientific and healthful conditions. That arrangement will 
care for some seasonal industries; others can arrange a 
succession of products according to the seasons and the 
equipment, and still others can, with more careful manag- 
ment, iron out their seasons. A complete study of any 
specific problem will show the way. 

The periodic depressions are more serious because they 
seem so vast as to be uncontrollable. Until the whole 
reorganization is brought about, they cannot be wholly 
controlled, but each man in business can easily do some- 
thing for himself and while benefiting his own organiza- 
tion in a very material way, also help others. The Ford 


production has not reflected good times or bad times; it hag 
kept right on regardless of conditions excepting from 1917 
cO 1919, when the factory was turned over to war work. 
The year 1912-1913 was supposed to be a dull one; 
although now some call it "normal"; we all but doubled 
our sales; 1913-1914 w^as dull; we increased our sales by 
more than a third. The year 1920-1921 is supposed to 
have been one of the most depressed in history; we sold a 
million and a quarter cars, or about five times as many as in 
1913-1914 — the "normal year." There is no particular 
secret in it. It is, as is everything else in our business, 
the inevitable result of the application of a principle which 
can be applied to any business. 

We now have a minimum wage of six dollars a day paid 
without reservation. The people are suflficiently used 
to high wages to make supervision unnecessary. The 
minimum wage is paid just as soon as a worker has quali« 
fied in his production — which is a matter that depends 
upon his own desire to work. We have put our estimate 
of profits into the wage and are now paying higher wages 
than during the boom times after the war. But we are, 
as always, paying them on the basis of work. And that 
the men do work is evidenced by the fact that although 
six dollars a day is the minimum wage, about 60 pef 
cent, of the w^orkers receive above the minimum. The 
six dollars is not a flat but a minimum wage. 

Consider first the fundamentals of prosperity. Progress 
is not made by pulhng off a series of stunts. Each step 
has to be regulated. A man cannot expect to progress 
without thinking. Take prosperity. A truly prosperous 
time is when the largest number of people are getting all 
they can legitimately eat and wear, and are in every sense 
of the word comfortable. It is the degree of the comfort 
of the people at large — not the size of the manufacturer's 
bank balance — that evidences prosperity. The function 


of the manufacturer is to contribute to this comfort. 
He is an instrument of society and he can serve society only 
as he manages his enterprises so as to turn over to the 
public an increasingly better product at an ever-decreas- 
ing price, and at the same time to pay to all those who have 
a hand in his business an ever-increasing wage, based 
upon the work they do. In this way and in this way alone 
can a manufacturer or any one in business justify his 

We are not much concerned with the statistics and the 
theories of the economists on the recurring cycles of 
prosperity and depression. They call the periods when 
prices are high "prosperous." A really prosperous period 
is not to be judged on the prices that manufacturers are 
quoting for articles. 

We are not concerned with combinations of words. 
If the prices of goods are above the incomes of the people, 
then get the prices down to the incomes. Ordinarily, 
business is conceived as starting with a manufacturing 
process and ending with a consumer. If that consumer 
does not want to buy what the manufacturer has to sell him 
and has not the money to buy it, then the manufacturer 
blames the consumer and says that business is bad, and 
thus, hitching the cart before the horse, he goes on his 
way lamenting. Isn't that nonsense? 

Does the manufacturer exist for the consumer or does 
the consumer exist for the manufacturer ? If the consumer 
will not — says he cannot — buy what the manufacturer has 
to offer, is that the fault of the manufacturer or the 
consumer? Or is nobody at fault? If nobody is at fault 
then the manufacturer must go out of business. 

But what business ever started with the manufacturer 
and ended with the consumer? Where does the money 
to make the wheels go round come from? From the 
consumer, of course. And success in manufacture is based 


solely upon an ability to serve that consumer to his liking. 
He may be served by quality or he may be served by price. 
He is best served by the highest quality at the lowest price, 
and any man who can give to the consumer the highest 
quality at the lowest price is bound to be a leader in 
business, whatever the kind of an article he makes. There 
is no getting away from this. 

Then why flounder around waiting for good business? 
Get the costs down by better management. Get the 
prices down to the buying power. 

Cutting wages is the easiest and most slovenly way to 
handle the situation, not to speak of its being an inhuman 
way. It is, in eflfect, throwing upon labour the incompe* 
tency of the managers of the business. If we only knew it, 
every depression is a challenge to every manufacturer 
to put more brains into his business — to overcome by 
management what other people try to overcome by wage 
reduction. To tamper with wages before all else is 
changed, is to evade the real issue. And if the real issue 
is tackled first, no reduction of wages may be necessary. 
That has been my experience. The immediate practical 
point is that, in the process of adjustment, someone will 
have to take a loss. And who can take a loss except those 
who have something which they can afford to lose? 
But the expression, *'take a loss," is rather misleading. 
Really no loss* is taken at all. It is only a giving up of a 
certain part of *the past profits in order to gain more in the 
future. I was talking not long since with a hardware 
merchant in a small town. He said: 

"I expect to take a loss of $10,000 on my stock. But of 
course, you know, it isn't really like losing that much. 
We hardware men have had pretty good times. Most 
of my stock was bought at high prices, but I have already 
sold several stocks and had the benefit of them. Besides, 
the ten thousand dollars which I say I will lose are not the 


same kind of dollars that I used to have. They are, in a 
way, speculative dollars. They are not the good dollars 
that bought 100 cents' worth. So, though my loss may 
sound big, it is not big. And at the same time I am 
making it possible for the people in my town to go on 
building their houses without being discouraged by the 
size of the hardware item. " 

He is a wise merchant. He would rather take les^ 
profit and keep business moving than keep his stock at 
high prices and bar the progress of his community. A man 
like that is an asset to a town. He has a clear head. 
He is better able to swing the adjustment through his 
inventory than through cutting down the wages of his 
delivery men — through cutting down their ability to buy. 

He did not sit around holding on to his prices and waiting 
for something to turn up. He reahzed what seems to have 
been quite generally forgotten — that it is part of proprie- 
torship every now and again to lose money. We had to 
take our loss. 

Our sales eventually fell off as all other sales fell off. 
We had a large inventory and, taking the materials and 
parts in that inventory at their cost price, we could not 
turn out a car at a price lower than we were asking, but 
that was a price which on the turn of business was higher 
than people could or wanted to pay. We closed down 
to get our bearings. We were faced with making a cut of 
$17,000,000 in the inventory or taking a much larger loss 
than that by not doing business. So there was no choice 
at all. 

That is always the choice that a man in business has. 
He can take the direct loss on his books and go ahead and 
do business or he can stop doing business and take the loss 
of idleness. The loss of not doing business is commonly 
a loss greater than the actual money involved, for during 
the period of idleness fear will consume initiative and, if 


the shutdown is long enough, there will be no energy left 
over to start up with again. 

There is no use waiting around for business to improve. 
If a manufacturer wants to perform his function, he must 
get his price down to what people will pay. There is 
always, no matter what the condition, a price that people 
can and will pay for a necessity, and always, if the will is 
there, that price can be met. 

It cannot be met by lowering quality or by short- 
sighted economy, which results only in a dissatisfied work- 
ing force. It cannot be met by fussing or buzzing around. 
It can be met only by increasing the eflSciency of produc- 
tion and, viewed in this fashion, each business depression, 
so-called, ought to be regarded as a challenge to the brains 
of the business community. Concentrating on prices 
instead of on service is a sure indication of the kind of 
business man who can give no justification for his existence 
as a proprietor. 

This is only another way of saying that sales should be 
made on the natural basis of real value, which is the cost 
of transmuting human energy into articles of trade and 
commerce. But that simple formula is not considered 
business-like. It is not complex enough. We have 
"business" which takes the most honest of all human 
activities and makes them subject to the speculative 
shrewdness of men who can produce false shortages of food 
and other commodities, and thus excite in society anxi- 
ety of demand. We have false stimulation and then false 

Economic justice is being constantly and quite often 
innocently violated. You may say that it is the economic 
condition which makes mankind what it is ; or you may say 
that it is mankind that makes the economic condition what 
it is. You will find many claiming that it is the economic 
system which makes men what they are. They blame 


our industrial system for all the faults which we be- 
hold in mankind generally. And you will find other 
men who say that man creates his own conditions; that 
if the economic, industrial, or social system is bad, it 
is but a reflection of what man himself is. What is wrong 
in our industrial system is a reflection of what is wrong in 
man himself. Manufacturers hesitate to admit that the 
mistakes of the present industrial methods are, in part at 
least, their own mistakes, systematized and extended. 
But take the question outside of a man's immediate 
concerns, and he sees the point readily enough. 

No doubt, with a less faulty human nature a less faulty 
social system would have grown up. Or, if human nature 
were worse than it is, a worse system would have grown up 
• — though probably a worse system would not have lasted 
as long as the present one has. But few will claim that 
mankind deliberately set out to create a faulty social 
system. Granting without reserve that all faults of the 
social system are in man himself, it does not follow that 
he deliberately organized his imperfections and established 
them. We shall have to charge a great deal up to igno^. 
ranee. We shall have to charge a great deal up to in* 

Take the beginnings of our present industrial system. 
There was no indication of how it would grow. Every 
new advance was hailed with joy. No one ever thought 
of "capital" and "labour" as hostile interests. No one 
ever dreamed that the very fact of success would bring 
insidious dangers with it. And yet with growth every 
imperfection latent in the system came out. A man's 
business grew to such proportions that he had to have 
more helpers than he knew by their first names; but that 
fact was not regretted ; it was rather hailed with joy. And 
yet it has since led to an impersonal system wherein 
the workman has become something less than a person 


— a mere part of the system. No one believes, of 
course, that this dehumanizing process was deliberately 
invented. It just grew. It was latent in the whole early 
system, but no one saw it and no one could foresee it. Only 
prodigious and unheard-of development could bring it to 

Take the industrial idea; what is it.^^ The true in- 
dustrial idea is not to make money. The industrial idea 
is to express a serviceable idea, to duplicate a useful idea, 
by as many thousands as there are people who need it. 

To produce, produce; to get a system that will reduce 
production to a fine art; to put production on such a basis 
as will provide means for expansion and the building of 
still more shops, the production of still more thousands 
of useful things — that is the real industrial idea. The 
negation of the industrial idea is the effort to make a profit 
out of speculation instead of out of work. There are 
short-sighted men who cannot see that business is bigger 
than any one man's interests. Business is a process of give 
and take, live and let live. It is cooperation among 
many forces and interests. TVTienever you find a man who 
believes that business is a river whose beneficial flow ought 
to stop as soon as it reaches him you find a man who 
thinks he can keep business alive by stopping its cir- 
culation. He would produce wealth by this stopping of 
the production of wealth. 

The principles of service cannot fail to cure bad business. 
Which leads us into the practical application of the prin- 
ciples of service and finance. 


How Cheaply Can Things Be Made? 

NO ONE will deny that if prices are sufficiently low, 
buyers will always be found, no matter what are 
supposed to be the business conditions. That is 
one of the elemental facts of business. Sometimes raw 
materials will not move, no matter how low the price. 
We have seen something of that during the last year, but 
that is because the manufacturers and the distributors were 
trying to dispose of high-cost stocks before making new 
engagements. The markets were stagnant, but not *' satu- 
rated " with goods. What is called a *' saturated " market 
is only one in which the prices are above the purchasing 

Unduly high prices are always a sign of unsound business, 
because they are always due to some abnormal condition. 
A healthy patient has a normal temperature; a healthy 
market has normal prices. High prices come about com- 
monly by reason of speculation following the report of a 
shortage. Although there is never a shortage in everything, 
a shortage in just a few important commodities, or even in 
one, serves to start speculation. Or again, goods may not 
be short at all. An inflation of currency or credit will cause 
a quick bulge in apparent buying power and the consequent 
opportunity to speculate. There may be a combination 
of actual shortages and a currency inflation — as frequently 
happens during war. But in any condition of unduly 
high prices, no matter what the real cause, the people pay 
the high prices because they think there is going to be a 
shortage. They may buy bread ahead of their own needs. 


so as not to be left later in the lurch, or they may buy in the 
hope of reselling at a profit. When there was talk of a sugar 
shortage, housewives who had never in their lives bought 
more than ten pounds of sugar at once tried to get stocks 
of one hundred or two hundred pounds, and while they 
were doing this, speculators were buying sugar to store in 
warehouses. Nearly all our war shortages were caused by 
speculation or buying ahead of need. 

No matter how short the supply of an article is supposed 
to be, no matter if the Government takes control and 
seizes every ounce of that article, a man who is willing 
to pay the money can always get whatever supply he is 
willing to pay for. No one ever knows actually how great 
or how small is the national stock of any commodity. The 
very best figures are not more than guesses; estimates of the 
world's stock of a commodity are still wilder. We may 
think we know how much of a commodity is produced on a 
certain day or in a certain month, but that does not tell us 
how much will be produced the next day or the next month. 
Likewise we do not know how much is consumed. By 
spending a great deal of money we might, in the course 
of time, get at fairly accurate figures on how much of a 
particular commodity was consumed over a period, but 
by the time those figures were compiled they would be 
utterly useless except for historical purposes, because in 
the next period the consumption might be double or half 
as much. People do not stay put. That is the trouble 
with all the framers of Socialistic and Communistic, 
and of all other plans for the ideal regulation of society. 
They all presume that people will stay put. The re- 
actionary has the same idea. He insists that everyone 
ought to stay put. Nobody does, and for that I am 

Consumption varies according to the price and the 
quality, and nobody knows or can figure out what future 


consumption will amount to, because every time a price 
is lowered a new stratum of buying power is reached. 
Everyone knows that, but many refuse to recognize it by 
their acts. When a storekeeper buys goods at a wrong 
price and finds they will not move, he reduces the price 
by degrees until they do move. If he is wise, instead 
of nibbling at the price and encouraging in his customers 
the hope of even lower prices, he takes a great big bite out 
of the price and gets the stuff out of his place. Everyone 
takes a loss on some proposition of sales. The common hope 
is that after the loss there may be a big profit to make up 
for the loss. That is usually a delusion. The profit 
out of which the loss has to be taken must be found in the 
business preceding the cut. Any one who w^as foolish 
enough to regard the high profits of the boom period as 
permanent profits got into financial trouble when the drop 
came. However, there is a belief, and a very strong one, 
that business consists of a series of profits and losses, and 
good business is one in which the profits exceed the losses. 
Therefore some men reason that the best price to sell at is 
the highest price which may be had. That is supposed 
to be good business practice. Is it.^* We have not foimd 
it so. 

We have found in buying materials that it is not worth 
while to buy for other than immediate needs. We buy 
only enough to fit into the plan of production, taking into 
consideration the state of transportation at the time. If 
transportation were perfect and an even flow of materials 
could be assured, it would not be necessary to carry any 
stock whatsoever. The carloads of raw materials would 
arrive on schedule and in the planned order and amounts, 
and go from the railway cars into production. That would 
save a great deal of money, for it would give a very rapid 
turnover and thus decrease the amount of money tied up 
in materials. With bad transportation one has to carry 


larger stocks. At the time of revaluing the inventory in 
1921 the stock was unduly high because transportation 
had been so bad. But we learned long ago never to buy 
ahead for speculative purposes. When prices are going up 
it is considered good business to buy far ahead, and when 
prices are up to buy as little as possible. It needs no argu- 
ment to demonstrate that, if you buy materials at ten cents 
a pound and the material goes later to twenty cents a pound 
you will have a distinct advantage over the man who is 
compelled to buy at twenty cents. But we have found that 
thus buying ahead does not pay. It is entering into a 
guessing contest. It is not business. If a man buys a 
large stock at ten cents, he is in a fine position as long as the 
other man is paying twenty cents. Then he later gets a 
chance to buy more of the material at twenty cents, and 
it seems to be a good buy because everything points 
to the price going to thirty cents. Having great 
satisfaction in his previous judgment, on which he made 
[money, he of course makes the new purchase. Then the 
price drops and he is just where he started. We have 
carefully figured, over the years, that buying ahead of 
requirements does not pay — that the gains on one pur- 
chase will be offset by the losses on another, and in the 
end we have gone to a great deal of trouble without any 
corresponding benefit. Therefore in our buying we simply 
get the best price we can for the quantity that we require. 
We do not buy less if the price be high and we do not buy 
more if the price be low. We carefully avoid bargain 
lots in excess of requirements. It was not easy to reach 
that decision. But in the end speculation will kill any 
manufacturer. Give him a couple of good purchases 
on which he makes money and before long he will be 
thinking more about making money out of buying and 
selling than out of his legitimate business, and he will 
smash. The only way to keep out of trouble is to buy 


what one needs — ^no more and no less. That course re- 
moves one hazard from business. 

This buying experience is given at length because it ex- 
plains our selling policy. Instead of giving attention to 
competitors or to demand, our prices are based on an esti- 
mate of what the largest possible number of people will 
want to pay, or can pay, for what we have to sell. And 
what has resulted from that policy is best evidenced by 
comparing the price of the touring car and the production. 


1909-10 $950 18,664 cars 

1910-11 $780 84,528 " 

1911-12 $690 78,440 " 

1912-13 $600 168,220 " 

1913-14 $550 248,307 " 

1914-15 $490 308,213 " 

1915-16 $440 £33,921 " 

1916-17 $360 785,432 " 

1917-18 $450 706,584 " 

1918-19 $525 533,706 " 
(The above two years were war years and the factory was in war 


1919-20 $575 to $440 996,660 '* 

1920-^1 $440 to $355 1,250,000 " 

The high prices of 1921 were, considering the financial 
inflation, not really high. At the time of writing the 
price is $497. These prices are actually lower than they 
appear to be, because improvements in quality are 
being steadily made. We study every car in order to 
discover if it has features that might be developed and 
adapted. If any one has anything better than we have 
we want to know it, and for that reason we buy one of every 
new car that comes out. Usually the car is used for a 
while, put through a road test, taken apart, and studied 


as to how and of what everything is made. Scattered 
about Dearborn there is probably one of nearly every 
make of car on earth. Every little while when we buy a 
new car it gets into the newspapers and somebody re- 
marks that Ford doesn't use the Ford. Last year we or- 
dered a big Lanchester — which is supposed to be the best 
car in England. It lay in our Long Island factory for 
several months and then I decided to drive it to Detroit. 
There were several of us and we had a little caravan — the 
Lanchester, a Packard, and a Ford or two. I happened 
to be riding in the Lanchester passing through a New 
York town and when the reporters came up they wanted 
to know right away why I was not riding in a Ford. 

"Well, you see, it is this way," I answered. "I am on 
a vacation now; I am in no hurry, we do not care much 
when we get home. That is the reason I am not in the 

You know, we also have a line of "Ford stories"! 

Our policy is to reduce the price, extend the operations, 
and improve the article. You will notice that the re- 
duction of price comes first. We have never considered 
any costs as fixed. Therefore we first reduce the price 
to a point where we believe more sales will result. Then we 
go ahead and try to make the price. We do not bother 
about the costs. The new price forces the costs down. 
The more usual way is to take the costs and then 
determine the price, and although that method may be 
scientific in the narrow sense, it is not scientific in the 
broad sense, because what earthly use is it to know the cost 
if it tells you you cannot manufacture at a price at which 
the article can be sold.'' But more to the point is the fact 
that, although one may calculate what a cost is, and of 
course all of our costs are carefully calculated, no one 
knows what a cost ought to be. One of the ways of dis- 
covering what a cost ought to be is to name a price so 


low as to force everybody in the place to the highest point 
of efficiency. The low price makes everybody dig for 
profits. We make more discoveries concerning manu- 
facturing and selling under this forced method than by 
any method of leisurely investigation. 

The payment of high wages fortunately contributes to 
the low costs because the men become steadily more 
efficient on account of being relieved of outside worries^ 
The payment of five dollars a day for an eight-hour day 
was one of the finest cost-cutting moves we ever made, and 
the six-dollar day wage is cheaper than the five. How far 
this will go, we do not know. 

We have always made a profit at the prices we have fixed 
and, just as we have no idea how high wages will go, we 
also have no idea how low prices will go, but there is no par- 
ticular use in bothering on that point. The tractor, for 
instance, was first sold for $750, then at $850, then at 
^Q^5, and the other day we cut it 37 per cent, to $395. 

The tractor is not made in connection with the auto- 
mobiles. No plant is large enough to make two articles. 
A shop has to be devoted to exactly one product in order 
to get the real economies. 

For most purposes a man with a machine is better than 
a man without a machine. By the ordering of design of 
product and of manufacturing process we are able to 
provide that kind of a machine which most multiplies the 
power of the hand, and therefore we give to that man a 
larger role of service, which means that he is entitled to a 
larger share of comfort. 

Keeping that principle in mind we can attack waste with 
a definite objective. We will not put into our establishment 
anything that is useless. We will not put up elaborate 
buildings as monuments to our success. The interest on 
the investment and the cost of their upkeep only serve 
to add uselessly to the cost of what is produced — so these 


monuments of success are apt to end as tombs. A great 
administration building may be necessary. In me it 
arouses a suspicion that perhaps there is too much ad- 
ministration. We have never found a need for elaborate 
administration and would prefer to be advertised by our 
product than by where we make our product. 

The standardization that effects large economies for 
the consumer results in profits of such gross magnitude to 
the producer that he can scarcely know what to do with 
his money. But his effort must be sincere, painstaking, 
and fearless. Cutting out a half-a-dozen models is not 
standardizing. It may be, and usually is, only the limit- 
ing of business, for if one is selling on the ordinary basis 
of profit — that is, on the basis of taking as much money 
away from the consumer as he will give up — then surely 
the consumer ought to have a wide range of choice. 

Standardization, then, is the final stage of the process* 
We start with consumer, work back through the design, 
and finally arrive at manufacturing. The manufactur- 
ing becomes a means to the end of service. 

It is important to bear this order in mind. As yet, the 
order is not thoroughly understood. The price relation 
is not understood. The notion persists that prices ought 
to be kept up. On the contrary, good business — ^large 
consumption — depends on their going down. 

And here is another point. The service must be the 
best you can give. It is considered good manufactur- 
ing practice, and not bad ethics, occasionally to change 
designs so that old models will become obsolete and new 
ones will have to be bought either because repair parts for 
the old cannot be had, or because the new model offers a 
new sales argument which can be used to persuade a 
consumer to scrap what he has and buy something new. 
We have been told that this is good business, that it is clever 
business, that the object of business ought to be to get 


people to buy frequently and that it is bad business to try 
to make anything that will last forever, because when once 
a man is sold he will not buy again. 

Our principle of business is precisely to the contrary. 
We cannot conceive how to serve the consumer unless we 
make for him something that, as far as we can provide, 
will last forever. We want to construct some kind of a 
machine that will last forever. It does not please us to 
have a buyer's car wear out or become obsolete. We want 
the man who buys one of our products never to have 
to buy another. We never make an improvement that 
renders any previous model obsolete. The parts of a 
specific model are not only interchangeable with all other 
cars of that model, but they are interchangeable with 
similar parts on all the cars that we have turned out. 
You can take a car of ten years ago and, buying to-day's 
parts, make it with very little expense into a car of to-day. 
Having these objectives the costs always come down imder 
pressure. And since we have the firm policy of steady 
price reduction, there is always pressure. Sometimes 
it is just harder! 

Take a few more instances of saving. The sweepings net 
six hundred thousand dollars a year. Experiments are 
constantly going on in the utilization of scrap. In one 
of the stamping operations six-inch circles of sheet metal 
are cut out. These formerly went into scrap. The waste 
worried the men. They worked to find uses for the discs. 
They found that the plates were just the right size and 
shape to stamp into radiator caps but the metal was not 
thick enough. They tried a double thickness of plates, 
with the result that they made a cap which tests proved to 
be stronger than one made out of a single sheet of metal. 
We get 150,000 of those discs a day. We have now found 
a use for about 20,000 a day and expect to find further 
uses for the remainder. We saved about ten dollars each 


by making transmissions instead of buying them. We 
experimented with bolts and produced a special bolt made 
on what is called an "upsetting machine" with a rolled 
thread that was stronger than any bolt we could buy, 
although in its making was used only about one third of 
the material that the outside manufacturers used. The 
saving on one style of bolt alone amounted to half a 
million dollars a year. We used to assemble our cars at 
Detroit, and although by special packing we managed to 
get five or six into a freight car, we needed many hundreds 
of freight cars a day. Trains were moving in and out all 
the time. Once a thousand freight cars were packed in a 
single day. A certain amount of congestion was inevitable. 
It is very expensive to knock down machines and crate 
them so that they cannot be injured in transit — to say 
nothing of the transportation charges. Now, we assemble 
only three or four hundred cars a day at Detroit — just 
enough for local needs. We now ship the parts to our 
assembling stations all over the United States and in 
fact pretty much all over the world, and the machines are 
put together there. Wherever it is possible for a branch 
to make a part more cheaply than we can make it in 
Detroit and ship it to them, then the branch makes the 

The plant at Manenester, England, is making nearly 
an entire car. The tractor plant at Cork, Ireland, is 
making almost a complete tractor. This is an enormous 
saving of expense and is only an indication of what may be 
done throughout industry generally, when each part of a 
composite article is made at the exact point where it may 
be made most economically. We are constantly experi- 
menting with every material that enters into the car. 
We cut most of our own lumber from our own forests. 
We are experimenting in the manufacture of artificial 
leather because we use about forty thousand yards of 


artificial leather a day. A penny here and a penny there 
runs into large amounts in the course of a year. 

The greatest development of all, however, is the River 
Rouge plant, which, when it is running to its full capacity, 
will cut deeply and in many directions into the price of 
everything we make. The whole tractor plant is now 
there. This plant is located on the river on the outskirts 
of Detroit and the property covers six hundred and sixty- 
five acres — enough for future development. It has a large 
slip and a turning basin capable of accommodating any 
lake steamship; a short-cut canal and some dredging will 
give a direct lake connection by way of the Detroit River. 
We use a great deal of coal. This coal comes directly from 
our mines over the Detroit, Toledo and Ironton Rail- 
way, which we control, to the Highland Park plant and 
the River Rouge plant. Part of it goes for steam pur- 
poses. Another part goes to the by-product coke ovens 
which we have established at the River Rouge plant. 
Coke moves on from the ovens by mechanical trans- 
mission to the blast furnaces. The low volatile gases from 
the blast furnaces are piped to the power plant boilers 
where they are joined by the sawdust and the shavings 
from the body plant — the making of all our bodies has 
been shifted to this plant — and in addition the coke 
"breeze" (the dust in the making of coke) is now also 
being utilized for stoking. The steam power plant is thus 
fired almost exclusively from what would otherwise be 
waste products. Immense steam turbines directly coupled 
with dynamos transform this power into electricity, and all 
of the machinery in the tractor and the body plants is run 
by individual motors from this electricity. In the course 
of time it is expected that there will be sufficient electricity 
to run practically the whole Highland Park plant, and we 
shall then have cut out our coal bill. 

Among the by-products of the coke ovens is a gas. 


It is piped both to the Rouge and Highland Park plants 
where it is used for heat-treat purposes, for the enamelling 
ovens, for the car ovens, and the like. We formerly had 
to buy this gas. The ammonium sulphate is used for 
fertilizer. The benzol is a motor fuel. The small sizes 
of coke, not suitable for the blast furnaces, are sold to the 
employees — delivered free into their homes at much less 
than the ordinary market price. The large-sized coke 
goes to the blast furnaces. There is no manual handling. 
We run the melted iron directly from the blast furnaces 
into great ladles. These ladles travel into the shops and 
the iron is poured directly into the moulds without another 
heating. We thus not only get a uniform quality of iron 
according to our own specifications and directly under 
our control, but we save a melting of pig iron and in fact 
cut out a whole process in manufacturing as well as mak- 
ing available all our own scrap. 

What all this will amount to in point of savings we do 
not know — that is, we do not know how great will be the 
saving, because the plant has not been running long 
enough to give more than an indication of what is ahead, 
and we save in so many directions — in transportation, in 
the generation of our power, in the generation of gas, in 
the expense in casting, and then over and above that is 
the revenue from the by-products and from the smaller 
sizes of coke. The investment to accomplish these ob- 
jects to date amounts to something over forty milHon 

How far we shall thus reach back to sources depends 
entirely on circumstances. Nobody anywhere can really 
do more than guess about the future costs of produc- 
tion. It is wiser to recognize that the future holds more 
than the past — that every day holds within it an improve- 
ment on the methods of the day before. 

But how about production? If every necessary of Hfe. 


were produced so cheaply and in such quantities, would 
not the world shortly be surfeited with goods? Will there 
not come a point when, regardless of price, people simply 
will not want anything more than what they already have? 
And if in the process of manufacturing fewer and fewer 
men are used, what is going to become of these men — how 
are they going to find jobs and live? 

Take the second point first. We mentioned many ma- 
chines and many methods that displaced great numbers 
of men and then someone asks : 

*' Yes, that is a very fine idea from the standpoint of the 
proprietor, but how about these poor fellows whose jobs 
are taken away from them?" 

The question is entirely reasonable, but it is a little 
curious that it should be asked. For when were men ever 
really put out of work by the bettering of industrial 
processes? The stage-coach drivers lost their jobs with 
the coming of the railways. Should we have prohibited 
the railways and kept the stage-coach drivers? Were 
there more men working with the stage-coaches than are 
working on the railways ? Should we have prevented the 
taxicab because its coming took the bread out of the 
mouths of the horse-cab drivers ? How does the number of 
taxicabs compare with the number of horse-cabs when the 
latter were in their prime? The coming of shoe machinery 
closed most of the shops of those who made shoes by hand. 
When shoes were made by hand, only the very well-to-do 
could own more than a single pair of shoes, and most 
working people went barefooted in summer. Now, 
hardly any one has only one pair of shoes, and shoe making 
is a great industry. No, every time you can so arrange 
that one man will do the work of two, you so add to the 
wealth of the country that there will be a new and better 
job for the man who is displaced. If whole industries 
changed overnight, then disposing of the surplus men 


would be a problem, but these changes do not occur as 
rapidly as that. They come gradually. In our own ex- 
perience a new place always opens for a man as soon as 
better processes have taken his old job. And what hap' 
pens in my shops happens everywhere in industry. 
There are many times more men to-day employed in the 
steel industries than there were in the days when every 
operation was by hand. It has to be so. It always is so 
and always will be so. And if any man cannot see it, it 
is because he will not look beyond his own nose. 
Now as to saturation. We are continually asked: 
*'When will you get to the point of overproduction? 
When will there be more cars than people to use them?'* 
We believe it is possible some day to reach the point 
where all goods are produced so cheaply and in such quan- 
tities that overproduction will be a reality. But as far as 
we are concerned, we do not look forward to that con- 
dition with fear — we look forward to it with great satis- 
faction. Nothing could be more splendid than a world in 
which everybody has all that he wants. Our fear is that 
this condition will be too long postponed. As to our own 
products, that condition is very far away. We do not 
know how many motor cars a family will desire to use of the 
particular kind that we make. We know that, as the price 
has come down, the farmer, who at first used one car (and 
it must be remembered that it is not so very long ago that 
the farm market for motor cars was absolutely unknown — 
the limit of sales was at that time fixed by all the wise 
statistical sharps at somewhere near the number of mil- 
lionaires in the country) now often uses two, and also he 
buys a truck. Perhaps, instead of sending workmen out 
to scattered jobs in a single car, it will be cheaper to send 
each worker out in a car of his own. That is happening 
with salesmen. The public finds its own consumptive 
needs with unerring accuracy, and since we no longer make 


jnotor cars or tractors, but merely the parts which when 
assembled become motor cars and tractors, the facilities 
a-s now provided would hardly be sufficient to provide re- 
placements for ten million cars. And it would be quite 
the same with any business. We do not have to bother 
about overproduction for some years to come, provided 
the prices are right. It is the refusal of people to buy 
on account of price that really stimulates real business. 
Then if we want to do business we have to get the prices 
down without hurting the quality. Thus price reduction 
forces us to learn improved and less wasteful methods of 
production. One big part of the discovery of what is 
"normal" in industry depends on managerial genius dis-« 
covering better ways of doing things. If a man reduces 
his selling price to a point where he is making no profit or 
incurring a loss, then he simply is forced to discover how 
to make as good an article by a better method — making 
his new method produce the profit, and not producing a 
profit out of reduced wages or increased prices to the 

It is not good management to take profits out of the 
workers or the buyers; make management produce the 
profits. Don't cheapen the product; don't cheapen the 
wage; don't overcharge the public. Put brains into the 
method, and more brains, and still more brains — do things 
better than ever before; and by this means all parties to 
business are served and benefited. 

And all of this can always be done. 


Money and Goods 

THE primary object of a manufacturing business is 
to produce, and if that objective is always kept, 
finance becomes a wholly secondary matter that 
has largely to do with bookkeeping. My own financial 
operations have been very simple. I started with the 
policy of buying and selling for cash, keeping a large fund 
of cash always on hand, taking full advantage of all dis- 
counts, and collecting interest on bank balances. I regard 
a bank principally as a place in which it is safe and con- 
venient to keep money. The minutes we spend on a com- 
petitor's business we lose on our own. The minutes we 
spend in becoming expert in finance we lose in production. 
The place to finance a manufacturing business is the shop, 
and not the bank. I would not say that a man in business 
needs to know nothing at all about finance, but he is better 
off knowing too little than too much, for if he becomes too 
expert he will get into the way of thinking that he can 
borrow money instead of earning it and then he will bor- 
row more money to pay back what he has borrowed, and 
instead of being a business man he will be a note juggler, 
trying to keep in the air a regular flock of bonds and notes. 
If he is a really expert juggler, he may keep going quite 
a long time in this fashion, but some day he is bound to 
make a miss and the whole collection will come tumbhng 
down around him. Manufacturing is not to be confused 
with banking, and I think that there is a tendency for too 
many business men to mix up in banking and for too many 
bankers to rniy up in business. The tendency is to dis- 


tort the true purposes of both business and banking and 
that hurts both of them. The money has to come out of 
the shop, not out of the bank, and I have found that the 
shop will answer every possible requirement, and in one 
case, when it was believed that the company was rather 
seriously in need of funds, the shop when called on raised a 
larger sum than any bank in this country could loan. 

We have been thrown into finance mostly in the way of 
denial. Some years back we had to keep standing a denial 
that the Ford Motor Company was owned by the Stand- 
ard Oil Company and with that denial, for convenience's 
sake, we coupled a denial that we were connected with any 
other concern or that we intended to sell cars by mail. 
Last year the best-liked rumour was that we were down in 
Wall Street hunting for money. I did not bother to deny 
that. It takes too much time to deny everything. In- 
stead, we demonstrated that we did not need any money. 
Since then I have heard nothing more about being financed 
by Wall Street. 

We are not against borrowing money and we are not 
against bankers. We are against trying to make borrowed 
money take the place of work. We are against the kind of 
banker who regards a business as a melon to be cut. The 
thing is to keep money and borrowing and finance gener- 
ally in their proper place, and in order to do that one has to 
consider exactly for what the money is needed and how it is 
going to be paid off. 

Money is only a tool in business. It is just a part of 
the machinery. You might as well borrow 100,000 lathes 
as $100,000 if the trouble is inside your business. More 
lathes will not cure it; neither will more money. Only 
heavier doses of brains and thought and wise courage can 
cure. A business that misuses what it has will continue 
to misuse what it can get. The point is — cure the misuse. 
When that is done, the business will begin to make its own 


money, just as a repaired human body begins to rnakc^ 
sufficient pure blood. 

Borrowing may easily become an excuse for not boring 
into the trouble. Borrowing may easily become a sop for 
laziness and pride. Some business men are too lazy to get 
into overalls and go down to see what is the matter. Or 
they are too proud to permit the thought that anything 
they have originated could go wrong. But the laws of 
business are like the law of gravity, and the man who 
opposes them feels their power. 

Borrowing for expansion is one thing; borrowing to 
make up for mismanagement and waste is quite another. 
You do not want money for the latter — for the reason that 
money cannot do the job. Waste is corrected by econ- 
omy; mismanagement is corrected by brains. Neither of 
these correctives has anything to do with money. Indeed, 
money under certain circumstances is their enemy. And 
many a business man thanks his stars for the pinch which 
showed him that his best capital was in his own brains and 
not in bank loans. Borrowing under certain circum- 
stances is just like a drunkard taking another drink to cure 
the effect of the last one. It does not do what it is ex- 
pected to do. It simply increases the difficulty. Tight- 
ening up the loose places in a business is much more prof- 
itable than any amount of new capital at 7 per cent. 

The internal ailments of business are the ones that re- 
quire most attention. "Business" in the sense of trading 
with the people is largely a matter of filling the wants of 
the people. If you make what they need , and sell it at a 
price which makes possession a help and not a hardship, 
then you will do business as long as there is business to do. 
People buy what helps them just as naturally as they 
drink water. 

But the process of making the article will require con- 
stant care. Machinery wears out and needs to be re- 


stored. Men grow uppish, lazy, or careless. A business 
is men and machines united in the production of a com- 
modity, and both the man and the machines need repairs 
and replacements. Sometimes it is the men "higher up" 
who most need revamping — and they themselves are al- 
ways the last to recognize it. When a business becomes 
congested with bad methods; when a business becomes ill 
through lack of attention to one or more of its functions; 
when executives sit comfortably back in their chairs as if 
the plans they inaugurated are going to keep them going 
forever; when business becomes a mere plantation on 
which to live, and not a big work which one has to 
do — then you may expect trouble. You will wake up 
some fine morning and find yourself doing more business 
than you have ever done before — and getting less out of it. 
You find yourself short of money. You can borrow 
money. And you can do it, oh, so easily. People will 
crowd money on you. It is the most subtle temptation 
the young business man has. But if you do borrow money 
you are simply giving a stimulant to whatever may be 
wrong. You feed the disease. Is a man more wise with 
borrowed money than he is with his own.? Not as a usual 
thing. To borrow under such conditions is to mortgage 
a declining property. 

The time for a business man to borrow money, if ever, 
is when he does not need it. That is, when he does not 
need it as a substitute for the things he ought himself to 
do. If a man's business is in excellent condition and in 
need of expansion, it is comparatively safe to borrow. 
But if a business is in need of money through mismanage- 
ment, then the thing to do is to get into the business and 
correct the trouble from the inside — ^not poultice it with 
loans from the outside. 

My financial policy is the result of my sales policy. I 
hold that it is better to sell a large number of articles at a 


small profit than to sell a few at a large profit. This en- 
ables a larger number of people to buy and it gives a larger 
number of men employment at good wages. It permits 
the planning of production, the elimination of dull seasons, 
and the waste of carrying an idle plant. Thus results a 
suitable, continuous business, and if you will think it over, 
you will discover that most so-called urgent financing is 
made necessary because of a lack of planned, continuous 
business. Reducing prices is taken by the short-sighted 
to be the same as reducing the income of a business. It is 
very difficult to deal with that sort of a mind because it is 
so totally lacking in even the background knowledge of 
what business is. For instance, I was once asked, when 
contemplating a reduction of eighty dollars a car, whether 
on a production of five hundred thousand cars this would 
not reduce the income of the company by forty million 
dollars. Of course if one sold only five hundred thousand 
cars at the new price, the income would be reduced forty 
million dollars — which is an interesting mathematical 
calculation that has nothing whatsoever to do with busi- 
ness, because unless you reduce the price of an article the 
sales do not continuously increase and therefore the busi- 
ness has no stability. 

If a business is not increasing, it is bound to be decreas- 
ing, and a decreasing business always needs a lot of financ- 
ing. Old-time business went on the doctrine that prices 
should always be kept up to the highest point at which 
people will buy. Really modern business has to take the 
opposite view. 

Bankers and lawyers can rarely appreciate this fact. 
They confuse inertia with stability. It is perfectly be- 
yond their comprehension that the price should ever vol- 
untarily be reduced. That is why putting the usual type 
of banker or lawyer into the management of a business is 
courting disaster. Reducing prices increases the volume 


and disposes of finance, provided one regards the inevi- 
table profit as a trust fund with which to conduct more and 
better business. Our profit, because of the rapidity of the 
turnover in the business and the great volume of sales, 
has, no matter what the price at which the product was 
sold, always been large. We have had a small profit per 
article but a large aggregate profit. The profit is not con- 
stant. After cutting the prices, the profits for a time run 
low, but then the inevitable economies begin to get in their 
work and the profits go high again. But they are not dis- 
tributed as dividends. I have always insisted on the pay- 
ment of small dividends and the company has to-day 
no stockholders who wanted a different policy. I regard 
business profits above a small percentage as belonging 
more to the business than to the stockholders. 

The stockholders, to my way of thinking, ought to be 
only those who are active in the business and who will 
regard the company as an instrument of service rather 
than as a machine for making money. If large profits are 
made — and working to serve forces them to be large — 
then they should be in part turned back into the business 
so that it may be still better fitted to serve, and in part 
passed on to the purchaser. During one year our profits 
were so much larger than we expected them to be that we 
voluntarily returned fifty dollars to each purchaser of a 
car. We felt that unwittingly we had overcharged the 
purchaser by that much. My price policy and hence my 
financial policy came up in a suit brought against the com- 
pany several years ago to compel the payment of larger 
dividends. On the witness stand I gave the poHcy then 
in force and which is still in force. It is this : 

In the first place, I hold that it is better to sell a large number of 
cars at a reasonably small margin than to sell fewer cars at a large 
margin of profit. 

I hold this because it enables a large number of people to buy and 


enjoy the use of a car and because it gives a larger number of men 
employment at good wages. Those are aims I have in life. But 
I would not be counted a success; I would be, in fact, a flat failure 
if I could not accomplish that and at the same time make a fair 
amount of profit for myself and the men associated with me in business. 

This policy I hold is good business policy because it works — be- 
cause with each succeeding year we have been able to put our car 
within the reach of greater and greater numbers, give employment 
to more and more men, and, at the same time, through the volume of 
business, increase our own profits beyond anything we had hoped for 
or even dreamed of when we started. 

Bear in mind, every time you reduce the price of the car without 
reducing the quality, you increase the possible number of purchasers. 
There are many men who will pay $360 for a car who would not 
pay $440. We had in round numbers 500,000 buyers of cars on the 
$440 basis, and I figure that on the $360 basis we can increase the 
sales to possibly 800,000 cars for the year — less profit on each car, 
but more cars, more employment of labour, and in the end we shall 
get all the total profit we ought to make. 

And let me say right here, that I do not believe that we should 
make such an awful profit on our cars. A reasonable profit is right, 
but not too much. So it has been my policy to force the price of the 
car down as fast as production would permit, and give the benefits 
to users and labourers — with resulting surprisingly enormous benefits 
to ourselves. 

This policy does not agree with the general opinion that 
a business is to be managed to the end that the stock- 
holders can take out the largest possible amount of cash. 
Therefore I do not want stockholders in the ordinary sense 
of the term — they do not help forward the ability to serve. 
My ambition is to employ more and more men and to 
spread, in so far as I am able, the benefits of the industrial 
system that we are working to found; we want to help 
build lives and homes. This requires that the largest 
share of the profits be put back into productive enter- 
prise. Hence we have no place for the non-working 
Stockholders. The working stockliolder is more anxious 
to increase his opportunity to serve than to bank dividends. 

K it at any time became a question between lowering 


wages or abolishing dividends, I would abolish dividends. 
That time is not apt to come, for, as I have pointed out, 
there is no economy in low wages. It is bad financial 
policy to reduce wages because it also reduces buying 
power. If one believes that leadership brings responsi- 
bihty, then a part of that responsibility is in seeing that 
those whom one leads shall have an adequate opportunity 
to earn a living. Finance concerns not merely the profit or 
solvency of a company; it also comprehends the amount 
of money that the company turns back to the community 
through wages. There is no charity in this. There is 
no charity in proper wages. It is simply that no company 
can be said to be stable which is not so well managed that 
it can afford a man an opportunity to do a great deal of 
work and therefore to earn a good wage. 

There is something sacred about wages — they represent 
homes and families and domestic destinies. People ought 
to tread very carefully when approaching wages. On the 
cost sheet, wages are mere figures; out in the world, wages 
are bread boxes and coal bins, babies' cradles and chil- 
dren's education — family comforts and contentment. On 
the other hand, there is something just as sacred about 
capital which is used to provide the means by which work 
can be made productive. Nobody is helped if our indus- 
tries are sucked dry of their life-blood. There is some- 
thing just as sacred about a shop that employs thousands 
of men as there is about a home. The shop is the main- 
stay of all the finer things which the home represents. If 
we want the home to be happy, we must contrive to keep 
the shop busy. The whole justification of the profits 
made by the shop is that they are used to make doubly 
secure the homes dependent on that shop, and to create 
more jobs for other men. If profits go to swell a personal 
fortune, that is one thing; if they go to provide a sounder 
basis for business, better working conditions, better wages. 


more extended employment — that is quite another thing. 
Capital thus employed should not be carelessly tampered 
with. It is for the service of all, though it may be under 
the direction of one. 

Profits belong in three places : they belong to the busi- 
ness — to keep it steady, progressive, and sound. They 
belong to the men who helped produce them. And they 
belong also, in part, to the public. A successful business 
is profitable to all three of these interests — planner, pro- 
ducer, and purchaser. 

People whose profits are excessive when measured by 
any sound standard should be the first to cut prices. 
But they never are. They pass all their extra costs down 
the line until the whole burden is borne by the consumer; 
and besides doing that, they charge the consumer a per- 
centage on the increased charges. Their whole business 
philosophy is : " Get while the getting is good." They are 
the speculators, the exploiters, the no-good element that 
is always injuring legitimate business. There is nothing 
to be expected from them. They have no vision. They 
cannot see beyond their own cash registers. 

These people can talk more easily about a 10 or 20 per 
cent, cut in wages than they can about a 10 or £0 per cent, 
cut in profits. But a business man, surveying the whole 
community in all its interests and wishing to serve that 
community, ought to be able to make his contribution to 

It has been our policy always to keep on hand a large 
amount of cash — the cash balance in recent years has 
usually been in excess of fifty million dollars. This is de- 
posited in banks all over the country. We do not bor- 
row but we have established lines of credit, so that if we 
so cared we might raise a very large amount of money by 
bank borrowing. But keeping the cash reserve makes 
borrowing unneces.'=aT>'y — our provision is only to be pre- 


pared to meet an emergency. I have no prejudice against 
proper borrowing. It is merely that I do not want to rmi 
the danger of having the control of the business and hence 
the particular idea of service to which I am devoted taken 
into other hands. 

A considerable part of finance is in the overcoming of 
seasonal operation. The flow of money ought to be 
nearly continuous. One must work steadily in order to 
work profitably. Shutting down involves great waste. 
It brings the waste of unemployment of men, the waste 
of unemployment of equipment, and the waste of re- 
stricted future sales through the higher prices of inter- 
rupted production. That has been one of the problems 
we had to meet. We could not manufacture cars to stock 
during the winter months when purchases are less than in 
spring or summer. Where or how could any one store half 
a million cars? And if stored, how could they be shipped 
in the rush season .^^ And who would find the money to 
carry such a stock of cars even if they could be stored .f* 

Seasonal work is hard on the working force. Good 
mechanics will not accept jobs that are good for only part of 
the year. To work in full force twelve months of the year 
guarantees workmen of ability, builds up a permanent 
manufacturing organization, and continually improves 
the product — the men in the factory, through uninter- 
rupted service, become more familiar with the operations. 

The factory must build, the sales department must sell, 
and the dealer must buy cars all the year through, if each 
would enjoy the maximum profit to be derived from the 
business. If the retail buyer will not consider purchasing 
except in "seasons,'* a campaign of education needs to be 
waged, proving the all-the-year-around value of a car 
rather than the limited-season value. And while the edu- 
cating is being done, the manufacturer must build, and the 
dealer must buy, in anticipation of business. 


We were the first to meet the problem in the automobile 
business. The selling of Ford cars is a merchandising 
proposition. In the days when every car was built to 
order and 50 cars a month a big output, it was reasonable 
to wait for the sale before ordering. The manufacturer 
waited for the order before building. 

We very shortly found that we could not do business on 
order. The factory could not be built large enough — even 
were it desirable — to make between March and August 
all the cars that were ordered during those months. 
Therefore, years ago began the campaign of education to 
demonstrate that a Ford was not a summer luxury but a 
year-round necessity. Coupled with that came the edu- 
cation of the dealer into the knowledge that even if he 
could not sell so many cars in winter as in summer it would 
pay him to stock in winter for the summer and thus be able 
to make instant delivery. Both plans have worked out; 
in most parts of the country cars are used almost as much 
in winter as in summer. It has been found that they will 
run in snow, ice, or mud — in anything. Hence the winter 
sales are constantly growing larger and the seasonal de- 
mand is in part lifted from the dealer. And he finds it 
profitable to buy ahead in anticipation of needs. Thus we 
have no seasons in the plant; the production, up until the 
last couple of years, has been continuous excepting for the 
annual shut downs for inventory. We have had an in- 
terruption during the period of extreme depression but it 
was an interruption made necessary in the process of reads 
justing ourselves to the market conditions. 

In order to attain continuous production and hence a 
continuous turning over of money we have had to plan 
our operations with extreme care. The plan of production 
is worked out very carefully each month between the sales 
and production departments, with the object of producing 
enough cars so that those in trar^it will take care of the or- 


ders in hand. Formerly, when we assembled and shipped 
cars, this was of the highest importance because we had no 
place in which to store finished cars. Now we ship parts 
instead of cars and assemble only those required for the 
Detroit district. That makes the planning no less im- 
portant, for if the production stream and the order stream 
are not approximately equal we should be either jammed 
with unsold parts or behind in our orders. When you are 
turning out the parts to make 4,000 cars a day, just a very 
Httle carelessness in overestimating orders will pile up a 
finished inventory running into the millions. That makes 
the balancing of operations an exceedingly delicate matter. 
In order to earn the proper profit on our narrow margin 
we must have a rapid turnover. We make cars to sell, not 
to store, and a month's unsold production would turn into 
a sum the interest on which alone would be enormous. 
The production is planned a year ahead and the number 
of cars to be made in each month of the year is scheduled, 
for of course it is a big problem to have the raw materials 
and such parts as we still buy from the outside flowing in 
consonance with production. We can no more afford tc 
carry large stocks of finished than we can of raw material. 
Everything has to move in and move out. And we have 
had some narrow escapes. Some years ago the plant of the 
Diamond Manufacturing Company burned down. They 
were making radiator parts for us and the brass parts — 
tubings and castings. We had to move quickly or take a 
big loss. We got together the heads of all our depart- 
ments, the pattern-makers and the draughtsmen. They 
worked from twenty-four to forty-eight hours on a stretch. 
They made new patterns ; the Diamond Company leased a 
plant and got some machinery in by express. We fur- 
nished the other equipment for them and in twenty days 
they were shipping again. We had enough stock on hand 
to carry us over, say, for seven or eight days, but that fire 


prevented us shipping cars for ten or fifteen days. Ex- 
cept for our having stock ahead it would have held us up 
for twenty days — and our expenses would have gone right 

To repeat. The place in which to finance is the shop. 
It has never failed us, and once, when it was thought that 
we were hard up for money, it served rather conclusively 
to demonstrate how much better finance can be conducted 
from the inside than from the outside. 


Money — Master or Servant? 

r*^ DECEMBER, 1920, business the country over was 
marking time. More automobile plants were closed 
than were open and quite a number of those which were 
closed were completely in the charge of bankers. Rumours 
of bad financial condition were afloat concerning nearly 
every industrial company, and I became interested when 
the reports persisted that the Ford Motor Company not 
only needed money but could not get it. I have become 
accustomed to all kinds of rumours about our company — so 
much so, that nowadays I rarely deny any sort of rumour. 
But these reports differed from all previous ones. They 
were so exact and circumstantial. I learned that I 
had overcome my prejudice against borrowing and that I 
might be found almost any day down in Wall Street, hat 
in hand, asking for money. And rimaour went even further 
and said that no one would give me money and that I 
might have to break up and go out of business. 

It is true that we did have a problem. In 1919 we 
had borrowed $70,000,000 on notes to buy the full stock 
interest in the Ford Motor Company. On this we had 
$33,000,000 left to pay. We had $18,000,000 in income 
taxes due or shortly to become due to the Government, 
and also we intended to pay our usual bonus for the year 
to the workmen, which amounted to $7,000,000. Alto- 
gether, between January 1st and April 18, 1921, we had 
payments ahead totalling $58,000,000. We had only 
$20,000,000 in bank. Our balance sheet was more or less 
common knowledge and I suppose it was taken for granted 



that we could not raise the $38,000,000 needed without 
borrowing. For that is quite a large sum of money. 
Without the aid of Wall Street such a sum could not easily 
and quickly be raised. We were perfectly good for the 
money. Two years before we had borrowed $70,000,000. 
And since our whole property was unencumbered and we 
had no commercial debts, the matter of lending a large 
sum to us would not ordinarily have been a matter of mo- 
ment. In fact, it would have been good banking business. 

However, I began to see that our need for money was 
being industriously circulated as an evidence of impending 
failure. Then I began to suspect that, although the ru- 
mours came in news dispatches from all over the country, 
they might perhaps be traced to a single source. This be- 
lief was further strengthened when we were informed that 
a very fat financial editor was at Battle Creek sending out 
bulletins concerning the acuteness of our financial con- 
dition. Therefore, I took care not to deny a single ru- 
mour. We had made our financial plans and they did not 
mclude borrowing money. 

I cannot too greatly emphasize that the very worst 
time to borrow money is when the banking people think 
that you need money. In the last chapter I outlined our 
financial principles. We simply applied those principles. 
We planned a thorough house-cleaning. 

Go back a bit and see what the conditions were. Along 
in the early part of 1920 came the first indications that the 
feverish speculative business engendered by the war was 
not going to continue. A few concerns that had sprung 
out of the war and had no real reason for existence failed. 
People slowed down in their buying. Our own sales kept 
right along, but we knew that sooner or later they would 
drop off. I thought seriously of cutting prices, but the 
costs of manufacturing everywhere were out of control. 
Labour gave less and less in return for high wages. The 


suppliers of raw material refused even to think of coming 
back to earth. The very plain warnings of the storm 
went quite unheeded. 

In June our own sales began to be affected. They grew 
less and less each month from June on until September. 
We had to do something to bring our product within the 
purchasing power of the public, and not only that, we had 
to do something drastic enough to demonstrate to the 
public that we were actually playing the game and not 
just shamming. Therefore in September we cut the price 
of the touring car from $575 to $440. We cut the price 
far below the cost of production, for we were still making 
from stock bought at boom prices. The cut created a 
considerable sensation. We received a deal of criticism. 
It was said that we were disturbing conditions. That is 
exactly what we were trying to do. We wanted to do our 
part in bringing prices from an artificial to a natural level. 
I am firmly of the opinion that if at this time or earlier 
manufacturers and distributors had all made drastic cuts 
in their prices and had put through thorough house- 
cleanings we should not have so long a business depression. 
Hanging on in the hope of getting higher prices simply 
delayed adjustment. Nobody got the higher prices they 
hoped for, and if the losses had been taken all at once, not 
only would the productive and the buying powers of the 
country have become harmonized, but we should have been 
saved this long period of general idleness. Hanging on in 
the hope of higher prices merely made the losses greater, 
because those who hung on had to pay interest on their 
high-priced stocks and also lost the profits they might 
have made by working on a sensible basis. Unemploy- 
ment cut down wage distribution and thus the buyer and 
the seller became more and more separated. There was a 
lot of flurried talk of arranging to give vast credits to 
Europe — the idea being that thereby the high-priced 


stocks might be palmed off. Of course the proposals 
were not put in any such crude fashion, and I think that 
quite a lot of people sincerely believed that if large credits 
were extended abroad even without a hope of the payment 
of either principal or interest, American business would 
somehow be benefited. It is true that if these credits 
were taken by American banks, those who had high- 
priced stocks might have gotten rid of them at a profit, 
but the banks would have acquired so much frozen credit 
that they would have more nearly resembled ice houses 
than banks. I suppose it is natural to hang on to the 
possibility of profits until the very last moment, but it is 
not good business. 

Our own sales, after the cut, increased, but soon they 
began to fall off again. We were not suflSciently within 
the purchasing power of the country to make buying easy. 
Retail prices generally had not touched bottom. The 
public distrusted all prices. We laid our plans for another 
cut and we kept our production around one hundred 
thousand cars a month. This production was not justified 
by our sales but we wanted to have as much as possible of 
our raw material transformed into finished product before 
we shut down. We knew that we would have to shut down 
in order to take an inventory and clean house. We 
wanted to open with another big cut and to have cars on 
hand to supply the demand. Then the new cars could be 
built out of material bought at lower prices. We de- 
termined that we were going to get lower prices. 

We shut down in December with the intention of open-^ 
ing again in about two weeks. We found so much to do 
that actually we did not open for nearly six weeks. The 
moment that we shut down the rumours concerning our 
financial condition became more and more active. I know 
that a great many people hoped that we should have to go 
put after money — for, were we seeking money, then we 


should have to come to terms. We did not ask for money. 
We did not want money. We had one offer of money. 
An oflScer of a New York bank called on me with a 
financial plan which included a large loan and in which 
also was an arrangement by which a representative of the 
bankers would act as treasurer and take charge of the 
finance of the company. Those people meant well 
enough, I am quite sure. We did not want to borrow 
money but it so happened that at the moment we were 
without a treasurer. To that extent the bankers had 
envisaged our condition correctly. I asked my son 
Edsel to be treasurer as well as president of the company. 
That fixed us up as to a treasurer, so there was really 
nothing at all that the bankers could do for us. 

Then we began our house-cleaning. During the war we 
had gone into many kinds of war work and had thus been 
forced to depart from our principle of a single product. 
This had caused many new departments to be added. 
The office force had expanded and much of the wasteful- 
ness of scattered production had crept in. War work is 
rush work and is wasteful work. We began throwing out 
everything that did not contribute to the production of 

The only immediate payment scheduled was the purely 
voluntary one of a seven-million-dollar bonus to our work- 
men. There was no obligation to pay, but we wanted to 
pay on the first of January. That we paid out of our 
cash on hand. 

Throughout the country we have thirty-five branches. 
These are all assembling plants, but in twenty-two of them 
parts are also manufactured. They had stopped the 
making of parts but they went on assembhng cars. At 
the time of shutting down we had practically no cars 
in Detroit. We had shipped out all the parts, and during 
January the Detroit dealers actually had to go as far^- 


afield as Chicago and Columbus to get cars for local needs. 
The branches shipped to each dealer, under his yearly 
quota, enough cars to cover about a month's sales. 
The dealers worked hard on sales. During the latter part 
of January we called in a skeleton organization of about 
ten thousand men, mostly foremen, sub-foremen, and straw 
bosses, and we started Highland Park into production. 
We collected our foreign accounts and sold our by-products. 
Then we were ready for full production. And gradually 
into full production we went — on a profitable basis. The 
house-cleaning swept out the waste that had both made 
the prices high and absorbed the profit. We sold off the 
useless stuff. Before we had employed fifteen men per 
car per day. Afterward we employed nine per car per day. 
This did not mean that six out of fifteen men lost their jobs. 
They only ceased being unproductive. We made that 
cut by applying the rule that everything and everybody 
must produce or get out. 

We cut our oflSce forces in halves and offered the oflSce 
workers better jobs in the shops. Most of them took the 
jobs. We abolished every order blank and every form 
of statistics that did not directly aid in the production of a 
car. We had been collecting tons of statistics because 
they were interesting. But statistics will not construct 
automobiles — so out they went. 

We took out 60 per cent, of our telephone extensions. 
Only a comparatively few men in any organization need 
telephones. We formerly had a foreman for every five 
men; now we have a foreman for every twenty men. 
The other foremen are working on machines. 

We cut the overhead charge from $146 a car to $93 a car, 
and when you realize what this means on more than four 
thousand cars a day you will have an idea how, not by 
economy, not by wage-cutting, but by the elimination of 
waste, it is possible to make an "impossible" price. 


Most important of all, we found out how to use less 
money in our business by speeding up the turnover. 
And in increasing the turnover rate, one of the most 
important factors was the Detroit, Toledo, & Ironton 
Railroad — which we purchased. The railroad took a large 
place in the scheme of economy. To the road itself I have 
given another chapter. 

We discovered, after a little experimenting, that freight 
service could be improved sufficiently to reduce the cycle 
of manufacture from twenty-two to fourteen days. That 
is, raw material could be bought, manufactured, and the 
finished product put into the hands of the distributor in 
(roughly) 33 per cent, less time than before. We had been 
carrying an inventory of around $60,000,000 to insure un- 
interrupted production. Cutting down the time one 
third released $20,000,000, or $1,200,000 a year in interest. 
Counting the finished inventory, we saved approximately 
$8,000,000 more — that is, we were able to release $28,000,- 
000 in capital and save the interest on that sum. 

On January 1st we had $20,000,000. On April 1st we 
had $87,300,000, or $27,300,000 more than we needed to 
wipe out all our indebtedness. That is what boring into 
the business did for us ! This amount came to us in these 
items : 

Cash on hand, January $20,000,000 

Stock on hand turned into cash, January 1 to April 1 . 24,700,000 

Speeding up transit of goods released 28,000,000 

Collected from agents in foreign countries .... 3,000,000 

Sale of by-products 3,700,000 

Sale of Liberty Bonds 7,900,000 

Total $87,300,000 

Now I have told about all this not in the way of an 
exploit, but to point out how a business may find re- 
sources within itself instead of borrowing, and also to 


start a little thinking as to whether the form of our money 
may not put a premium on borrowing and thus give far 
too great a place in life to the bankers. 

We could have borrowed $40,000,000 — more had we 
wanted to. Suppose we had borrowed, what would have 
happened? Should we have been better fitted to go on 
with our business.? Or worse fitted .f* If we had borrowed 
we should not have been under the necessity of finding 
methods to cheapen production. Had we been able to 
obtain the money at 6 per cent, flat — and we should in 
commissions and the like have had to pay more than that 
— the interest charge alone on a yearly production of 
500,000 cars would have amounted to about four dollars a 
car. Therefore we should now be without the benefit of 
better production and loaded with a heavy debt. Our cars 
would probably cost about one hundred dollars more than 
they do; hence we should have a smaller production, 
for we could not have so many buyers; we should employ 
fewer men, and in short, should not be able to serve to 
the utmost. You will note that the financiers proposed 
to cure by lending money and not by bettering methods. 
They did not suggest putting in an engineer; they wanted 
to put in a treasurer. 

And that is the danger of having bankers in business. 
They think solely in terms of money. They think of a 
factory as making money, not goods. They want to watch 
the money, not the eflBciency of production. They cannot 
comprehend that a business never stands still, it must go 
forward or go back. They regard a reduction in prices as a 
throwing away of profit instead of as a building of business. 

Bankers play far too great a part in the conduct of 
industry. Most business men will privately admit that 
fact. They will seldom publicly admit it because they are 
afraid of their bankers. It required less skill to make a 
fortune deaUng in money than dealing in production. 


The average successful banker is by no means so intelligent 
and resourceful a man as is the average successful business 
man. Yet the banker through his control of credit 
practically controls the average business man. 

There has been a great reaching out by bankers in the 
last fifteen or twenty years — and especially since the war — 
and the Federal Reserve System for a time put into their 
hands an almost limitless supply of credit. The banker is, 
as I have noted, by training and because of his position, 
totally unsuited to the conduct of industry. If, therefore, 
the controllers of credit have lately acquired this very 
large power, is it not to be taken as a sign that there is 
something wrong with the financial system that gives to 
finance instead of to service the predominant power in 
industry.'^ It was not the industrial acumen of the bankers 
that brought them into the management of industry. 
Everyone will admit that. They were pushed there, 
willy-nilly, by the system itself. Therefore, I personally 
want to discover whether we are operating under the best 
financial system. 

Now, let me say at once that my objection to bankers 
has nothing to do with personalities. I am not against 
bankers as such. We stand very much in need of 
thoughtful men, skilled in finance. The world cannot go 
on without banking facilities. We have to have money. 
We have to have credit. Otherwise the fruits of pro- 
duction could not be exchanged. We have to have 
capital. Without it there could be no production. But 
whether we have based our banking and our credit on 
the right foundation is quite another matter. 

It is no part of my thought to attack our financial 
system. I am not in the position of one who has been 
beaten by the system and wants revenge. It does not 
make the least difference to me personally what bankers 
do because we have been able to manage our affairs without 


outside financial aid. My inquiry is prompted by no 
personal motive whatsoever. I only want to know 
whether the greatest good is being rendered to the greatest 

No financial system is good which favours one class of 
producers over another. We want to discover whether it 
is not possible to take away power which is not based on 
wealth creation. Any sort of class legislation is pernicious. 
I think that the country's production has become so 
changed in its methods that gold is not the best medium 
with which it may be measured, and that the gold stand- 
ard as a control of credit gives, as it is now (and I believe 
inevitably) administered, class advantage. The ultimate 
check on credit is the amount of gold in the country, 
regardless of the amount of wealth in the country. 

I am not prepared to dogmatize on the subject of money 
or credit. As far as money and credit are concerned- 
no one as yet knows enough about them to dogmatize. 
The whole question will have to be settled as all other 
questions of real importance have to be settled, and that 
is by cautious, well-founded experiment. And I am not 
inclined to go beyond cautious experiments. We have to 
proceed step by step and very carefully. The question 
is not political, it is economic, and I am perfectly certain 
that helping the people to think on the question is wholly 
advantageous. They will not act without adequate 
knowledge, and thus cause disaster, if a sincere effort is 
made to provide them with knowledge. The money 
question has first place in multitudes of minds of all 
degrees or power. But a glance at most of the cure-all 
systems shows how contradictory they are. The majority 
of them make the assumption of honesty among mankind, 
to begin with, and that, of course, is a prime defect. 
Even our present system would work splendidly if all men 
were honest. As a matter of fact, the whole money 


question is 95 per cent, human nature; and your success- 
ful system must check human nature, not depend upon 

The people are thinking about the money question; 
and if the money masters have any information which 
they think the people ought to have to prevent them going 
astray, now is the time to give it. The days are fast 
slipping away when the fear of credit curtailment will 
avail, or when wordy slogans will affright. The people 
are naturally conservative. They are more conservative 
than the financiers. Those who believe that the people 
are so easily led that they would permit printing presses 
to run off money like milk tickets do not understand 
them. It is the innate conservation of the people that 
has kept our money good in spite of the fantastic tricks 
which the financiers play — and which they cover up with 
high technical terms. 

The people are on the side of sound money. They are 
so unalterably on the side of sound money that it is a 
serious question how they would regard the system under 
which they live, if they once knew what the initiated can 
do with it. 

The present money system is not going to be changed 
by speech-making or political sensationalism or economic 
experiment. It is going to change under the pressure 
of conditions — conditions that we cannot control and 
pressure that we cannot control. These conditions are 
now with us; that pressure is now upon us. 

The people must be helped to think naturally about 
money. They must be told what it is, and what makes it 
money, and what are the possible tricks of the present 
system which put nations and peoples under control of the 

Money, after all, is extremely simple. It is a part of our 
transportation system. It is a simple and direct method 


of conveying goods from one person to another. Money 
is in itself most admirable. It is essential. It is not 
intrinsically evil. It is one of the most useful devices 
in social life. And when it does what it was intended 
to do, it is all help and no hindrance. 

But money should always be money. A foot is always 
twelve inches, but when is a dollar a dollar? If ton weights 
changed in the coal yard, and peck measures changed in 
the grocery, and yard sticks were to-day 42 inches and 
to-morrow 33 inches (by some occult process called 
"exchange") the people would mighty soon remedy that. 
When a dollar is not always a dollar, when the 100-cent 
dollar becomes the 65 -cent dollar, and then the 50-cent 
dollar, and then the 47-cent dollar, as the good old American 
gold and silver dollars did, what is the use of yelling about 
"cheap money," "depreciated money"? A dollar that 
stays 100 cents is as necessary as a pound that stays 
16 ounces and a yard that stays 36 inches. 

The bankers who do straight banking should regard 
themselves as naturally the first men to probe and under- 
stand our monetary system — instead of being content with 
the mastery of local banking-house methods; and if they 
would deprive the gamblers in bank balances of the name, 
of "banker" and oust them once for all from the place of 
influence which that name gives them, banking would be 
restored and established as the public service it ought to be, 
and the iniquities of the present monetary system and 
fibaancial devices would be lifted from the shoulders of the 

There is an "if" here, of course. But it is not insur- 
mountable. Affairs are coming to a jam as it is, and if 
those who possess technical facility do not engage to remedy 
the case, those who lack that facility may attempt it. 
Nothing is more foolish than for any class to assume that 
progress is an attack upon it. Progress is only a call made 


upon it to lend its experience for the general advancement. 
It is only those who are unwise who will attempt to ob- 
struct progress and thereby become its victims. All of us 
are here together, all of us must go forward together; it is 
perfectly silly for any man or class to take umbrage at the 
stirring of progress. If financiers feel that progress is only 
the restlessness of weak-minded persons, if they regard all 
suggestions of betterment as a personal slap, then they are 
taking the part which proves more than anything else 
could their unfitness to continue in their leadership. 

If the present faulty system is more profitable to a 
financier than a more perfect system would be, and if that 
financier values his few remaining years of personal profits 
more highly than he would value the honour of making a 
contribution to the fife of the world by helping to erect a 
better system, then there is no way of preventing a clash 
of interests. But it is fair to say to the selfish financial 
interests that, if their fight is waged to perpetuate a system 
just because it profits them, then their fight is already lost. 
Why should finance fear.'' The world will still be here. 
Men will do business with one another. There will be 
money and there will be need of masters of the mechanism 
of money. Nothing is going to depart but the knots and 
tangles. There will be some readjustments, of course. 
Banks will no longer be the masters of industry. They 
will be the servants of industry. Business will control 
money instead of money controlling business. The ruinous 
interest system will be greatly modified. Banking will 
not be a risk, but a service. Banks will begin to do much 
more for the people than they do now, and instead of being 
the most expensive businesses in the world to manage, and 
the most highly profi^^ble in the matter of dividends, they 
will become less costly, and the profits of their operation 
will go to the community which they serve. 

Two facts of the old order are fundamental. First: 


that within the nation itself the tendency of financial 
control is toward its largest centralized banking institu- 
tions — either a government bank or a closely allied group 
of private financiers. There is always in every nation a 
definite control of credit by private or semi-public interests. 
Second: in the world as a whole the same centralizing 
tendency is operative. An American credit is under 
control of New York interests, as before the war world 
credit was controlled in London — the British pound ster- 
ling was the standard of exchange for the world's trade. 

Two methods of reform are open to us, one beginning at 
the bottom and one beginning at the top. The latter is the 
more orderly way, the former is being tried in Russia. 
If our reform should begin at the top it will require a social 
vision and an altruistic fervour of a sincerity and intensity 
which is wholly inconsistent with selfish shrewdness. 

The wealth of the world neither consists in nor is ade- 
quately represented by the money of the world. Gold 
itself is not a valuable commodity. It is no more wealth 
than hat checks are hats. But it can be so manipulated, 
as the sign of wealth, as to give its owners or controllers 
the whip-hand over the credit which producers of real 
wealth require. Dealing in money, the commodity of 
exchange, is a very lucrative business. When money it- 
self becomes an article of commerce to be bought and sold' 
before real wealth can be moved or exchanged, the usurers 
and speculators are thereby permitted to lay a tax on 
production. The hold which controllers of money are able 
to maintain on productive forces is seen to be more power- 
ful when it is remembered that, although money is supposed 
to represent the real wealth of the world, there is always 
much more wealth than there is mon^y, and real wealth is 
often compelled to wait upon money, thus leading to that 
most paradoxical situation — a world filled with wealth 
but suffering want. 


These facts are not merelj'" fiscal, to be cast into figures 
and left there. They are instinct with human destiny 
and they bleed. The poverty of the world is seldom caused 
by lack of goods but by a "money stringency." Com- 
mercial competition between nations, which leads to 
international rivalry and ill-will, which in their turn breed 
wars — these are some of the human significations of these 
facts. Thus poverty and war, two great preventable evils, 
grow on a single stem. 

Let us see if a beginning toward a better method can- 
not be made. 

Why Be Poor? 

POVERTY springs from a number of sources, the 
more important of which are controllable. So does 
special privilege. I think it is entirely feasible to 
abolish both poverty and special privilege — and there 
can be no question but that their abolition is desirable. 
Both are unnatural, but it is work, not law, to which we 
must look for results. 

By poverty I mean the lack of reasonably sufficient 
food, housing, and clothing for an individual or a family. 
There will have to be differences in the grades of suste- 
nance. Men are not equal in mentality or in physique. 
Any plan which starts with the assumption that men are or 
ought to be equal is unnatural and therefore unworkable. 
There can be no feasible or desirable process of levelling 
down. Such a course only promotes poverty by making 
it universal instead of exceptional. Forcing the efficient 
producer to become inefficient does not make the inef- 
ficient producer more efficient. Poverty can be done away 
with only by plenty, and we have now gone far enough 
along in the science of production to be able to see, as a 
natural development, the day when production and dis- 
tribution will be so scientific that all may have according 
to ability and industry. 

The extreme Socialists went wide of the mark in their 
reasoning that industry would inevitably crush the worker. 
Modern industry is gradually lifting the worker and the 
world. We only need to know more about planning and 
methods. The best results can and will be brought about 


by individual initiative and ingenuity — by intelligent 
individual leadership. The government, because it is 
essentially negative, cannot give positive aid to any 
really constructive programme. It can give negative aid 
— by removing obstructions to progress and by ceasing to 
be a burden upon the community. 

The underlying causes of poverty, as I can see them, 
are essentially due to the bad adjustment between produc- 
tion and distribution, in both industry and agriculture — 
between the source of power and its application. The 
wastes due to lack of adjustment are stupendous. All of 
these wastes must fall before intelligent leadership 
consecrated to service. So long as leadership thinks 
more of money than it does of service, the wastes will 
continue. Waste is prevented by far-sighted not by 
short-sighted men. Short-sighted men think first of 
money. They cannot see waste. They think of service 
as altruistic instead of as the most practical thing in the 
world. They cannot get far enough away from the 
little things to see the big things — to see the biggest thing 
of all, which is that opportunist production from a purely 
money standpoint is the least profitable. 

Service can be based upon altruism, but that sort of 
service is not usually the best. The sentimental trips up 
the practical. 

It is not that the industrial enterprises are unable 
fairly to distribute a share of the wealth which they create. 
It is simply that the waste is so great that there is not a 
sufficient share for everyone engaged, notwithstanding the 
fact that the product is usually sold at so high a price as 
to restrict its fullest consumption. 

Take some of the wastes. Take the wastes of power. 
The Mississippi Valley is without coal. Through its 
centre pour many millions of potential horsepower — 
the Mississippi River. But if the people by its banks want 


power or heat they buy coal that has been hauled hundreds 
of miles and consequently has to be sold at far above its 
worth as heat or power. Or if they cannot afford to buy 
this expensive coal, they go out and cut down trees, there- 
by depriving themselves of one of the great conservers of 
water power. Until recently they never thought of the 
power at hand which, at next to nothing beyond the 
initial cost, could heat, light, cook, and work for the huge 
population which that valley is destined to support. 

The cure of poverty is not in personal economy but in 
better production. The "thrift" and "economy" ideas 
have been overworked. The word "economy" represents 
a fear. The great and tragic fact of waste is impressed 
on a mind by some circumstance, usually of a most 
materialistic kind. There comes a violent reaction 
against extravagance — the mind catches hold of the idea 
of "economy." But it only flies from a greater to a lesser 
evil; it does not make the full journey from error to truth. 

Economy is the rule of half-alive^ minds. There can be 
no doubt that it is better than waste; neither can there be 
any doubt that it is not as good as use. People who pride 
themselves on their economy take it as a virtue. But 
what is more pitiable than a poor, pinched mind spending 
the rich days and years clutching a few bits of metal .'^ 
What can be fine about paring the necessities of life to the 
very quick? We all know "economical people" who- 
seem to be niggardly even about the amount of air they 
breathe and the amount of appreciation they will allow 
themselves to give to anything. They shrivel — body and 
soul. Economy is waste: it is waste of the juices of life, 
the sap of living. For there are two kinds of waste — 
that of the prodigal who throws his substance away in 
riotous living, and that of the sluggard who allows his 
substance to rot from non-use. The rigid economizer is 
in danger of being classed with the sluggard. Extra va», 


gance 15 usually a reaction from suppressioaof expenditure. 
Economy is likely to be a reaction from extravagance. 

Everything was given us to use. There is no evil from 
which we suffer that did not come about through misuse.' 
The worst sin we can commit against the things of our 
common life is to misuse them. "Misuse" is the wider 
term. We like to say "waste," but waste is only one 
phase of misuse. All waste is misuse; all misuse is waste. 

It is possible even to overemphasize the saving habit. 
It is proper and desirable that everyone have a margin; 
it is really wasteful not to have one — if you can have one. 
But it can be overdone. We teach children to save 
their money. As an attempt to counteract thoughtless 
and selfish expenditure, that has a value. But it is not 
positive; it does not lead the child out into the safe and 
useful avenues of self-expression or self -expenditure. To 
teach a child to invest and use is better than to teach him 
to save. Most men who are laboriously saving a few 
dollars would do better to invest those few dollars — first 
in themselves, and then in some useful work. Eventually 
they would have more to save. Young men ought to 
invest rather than save. They ought to invest in them- 
selves to increase creative value; after they have taken 
themselves to the peak of usefulness, then will be time 
enough to think of laying aside, as a fixed pohcy, a certain 
substantial share of income. You are not "saving" 
when you prevent yourself from becoming more productive. 
You are really taking away from your ultimate capital; 
you are reducing the value of one of nature's investments. 
The principle of use is the true guide. Use is positive, 
active, life-giving. Use is alive. Use adds to the sum 
of good. 

Personal want may be avoided without cnanging the 
general condition. Wage increases, price increases, profit 
increases, other kinds of increases designed to bring more. 


money here or money there, are only attempts of this or 
that class to get out of the fire — regardless of what may 
happen to everyone else. There is a foolish belief that if 
only the money can be gotten, somehow the storm can 
be weathered. Labour believes that if it can get more 
wages, it can weather the storm. Capital thinks that if 
it can get more profits, it can weather the storm. There 
is a pathetic faith in what money can do. Money is 
very useful in normal times, but money has no more value 
than the people put into it by production, and it can be so 
misused. It can be so superstitiously worshipped as a sub- 
stitute for real wealth as to destroy its value altogether. 

The idea persists that there exists an essential conflict 
between industry and the farm. There is no such con- 
flict. It is nonsense to say that because the cities are 
overcrowded everybody ought to go back to the farm» 
If everybody did so farming would soon decline as a satis- 
factory occupation. It is not more sensible for everyone 
to flock to the manufacturing towns. If the farms be 
deserted, of what use are manufacturers? A reciproc- 
ity can exist between farming and manufacturing. The 
manufacturer can give the farmer what he needs to be a 
good farmer, and the farmer and other producers of raw 
materials can give the manufacturer what he needs to be 
a good manufacturer. Then with transportation as a 
messenger, we shall have a stable and a sound system on 
built service. If we live in smaller communities where 
the tension of living is not so high, and where the products 
of the fields and gardens can be had without the inter- 
ference of so many profiteers, there will be little poverty or 

Look at this whole matter of seasonal work. Take 
building as an example of a seasonal trade. What a waste 
of power it is to allow builders to hibernate through the 
winter, waiting for the building season to come around! 


And what an equal waste of skill it is to force experienced 
artisans who have gone into factories to escape the loss of 
the winter season to stay in the factory jobs through the 
building season because they are afraid they may not get 
their factory places back in the winter. What a waste this, 
all-year system has been! If the farmer could get away 
from the shop to till his farm in the planting, growing, and 
harvesting seasons (they are only a small part of the year, 
after all), and if the builder could get away from the shop 
to ply his useful trade in its season, how much better 
they would be, and how much more smoothly the world 
would proceed. 

Suppose we all moved outdoors every spring and summer 
and hved the wholesome life of the outdoors for three or 
four months! We could not have "slack times." 

The farm has its dull season. That is the time for the 
farmer to come into the factory and help produce the 
things he needs to till the farm. The factory also has its 
dull season. That is the time for the workmen to go 
out to the land to help produce food. Thus we might 
take the slack out of work and restore the balance between 
the artificial and the natural. 

But not the least benefit would be the more balanced 
view of life we should thus obtain. The mixing of the 
arts is not only beneficial in a material way, but it makes 
for breadth of mind and fairness of judgment. A great 
deal of our unrest to-day is the result of narrow, preju- 
diced judgment. If our work were more diversified, if we 
saw more sides of life, if we saw how necessary was one 
factor to another, we should be more balanced. Every 
man is better for a period of work under the open sky. 

It is not at all impossible. What is desirable and right 
is never impossible. It would only mean a little team- 
work — a little less attention to greedy ambition and a 
little more attention to life. 


Those who are rich find it desirable to go away for three 
or four months a year and dawdle in idleness around some 
fancy winter or summer resort. The rank and file of the 
American people would not waste their time that way even 
if they could. But they would provide the team-work 
necessary for an outdoor, seasonal employment. 

It is hardly possible to doubt that much of the unrest 
we see about us is the result of unnatural modes of life. 
Men who do the same thing continuously the year around 
and are shut away from the health of the sun and the 
spaciousness of the great out of doors are hardly to be 
blamed if they see matters in a distorted light. And 
that applies equally to the capitalist and the worker. 

What is there in life that should hamper normal and 
wholesome modes of living? And what is there in in- 
dustry incompatible with all the arts receiving in their 
turn the attention of those qualified to serve in them? 
It may be objected that if the forces of industry were 
withdrawn from the shops every summer it would impede 
production. But we must look at the matter from a 
universal point of view. We must consider the increased 
energy of the industrial forces after three or four months in 
outdoor work. We must also consider the effect on the 
cost of living which would result from a general return to 
the fields. 

We have, as I indicated in a previous chapter, been 
working toward this combination of farm and factory 
and with entirely satisfactory results. At North ville, not 
far from Detroit, we have a little factory making valves. 
It is a little factory, but it makes a great many valves. 
Both the management and the mechanism of the plant are 
comparatively simple because it makes but one thing. 
We do not have to search for skilled employees. The skill 
is in the machine. The people of the countryside can 
work in the plant part of the time and on the farm part of 


the time, for mechanical farming is not very laborious. 
The plant power is derived from water. 

Another plant on a somewhat larger scale is in building 
at Flat Rock, about fifteen miles from Detroit. We have 
dammed the river. The dam also serves as a bridge 
for the Detroit, Toledo & Ironton Railway, which was in 
need of a new bridge at that point, and a road for the 
public — all in one construction. We are going to make 
our glass at this point. The damming of the river gives 
sufficient water for the floating to us of most of our raw 
material. It also gives us our power through a hydro- 
electric plant. And, being well out in the midst of the 
farming country, there can be no possibility of crowding 
or any of the ills incident to too great a concentration of 
population. The men will have plots of ground or farms 
as well as their jobs in the factory, and these can be scat- 
tered over fifteen or twenty miles surrounding — ^for of 
course nowadays the workingman can come to the shop in 
an automobile. There we shall have the combination of 
agriculture and industrialism and the entire absence of all 
the evils of concentration. 

The belief that an industrial country has to concentrate 
its industries is not, in my opinion, well-founded. That 
is only a stage in industrial development. As we learn 
more about manufacturing and learn to make articles with 
interchangeable parts, then those parts can be made under 
the best possible conditions. And these best possible 
conditions, as far as the employees are concerned, are also 
the best possible conditions from the manufacturing 
standpoint. One could not put a great plant on a little 
stream. One can put a small plant on a little stream, and 
the combination of Httle plants, each making a single part, 
will make the whole cheaper than a vast factory would. 
There are exceptions, as where casting has to be done. 
In such case, as at River Rouge, we want to combine the 


making of the metal and the casting of it and also we want 
to use all of the waste power. This requires a large in- 
vestment and a considerable force of men in one place. 
But such combinations are the exception rather than 
the rule, and there would not be enough of them seriously 
to interfere with the process of breaking down the con- 
centration of industry. 

Industry will decentralize. There is no city that would 
be rebuilt as it is, were it destroyed — which fact is in 
itself a confession of our real estimate of our cities. The 
city had a place to fill, a work to do. Doubtless the 
country places would not have approximated their livable- 
ness had it not been for the cities. By crowding together, 
men have learned some secrets. They would never have 
learned them alone in the country. Sanitation, lighting, 
social organization — all these are products of men's 
experience in the city. But also every social ailment 
from which we to-day suffer originated and centres in the 
big cities. You will find the smaller communities living 
along in unison with the seasons, having neither extreme 
poverty nor wealth — ^none of the violent plagues of up- 
heave and unrest which afflict our great populations. 
There is something about a city of a milUon people which 
is untamed and threatening. Thirty miles away, happy 
and contented villages read of the ravings of the city! 
A great city is really a helpless mass. Everything it uses 
is carried to it. Stop transport and the city stops. It lives 
off the shelves of stores. The shelves produce nothing. 
The city cannot feed, clothe, warm, or house itseK. City 
conditions of work and living are so artificial that in- 
stincts sometimes rebel against their unnaturalness. 

And finally, the overhead expense of hving or doing 
business in the great cities is becoming so large as to be 
imbearable. It places so great a tax upon life that there 
is no surplus over to live on. The politicians have found it 


easy to borrow money and they have borrowed to the 
limit. Within the last decade the expense of rmining 
every city in the country has tremendously increased. 
A good part of that expense is for interest upon money 
borrowed; the money has gone either into non-productive 
brick, stone, and mortar, or into necessities of city life, such 
as water supplies and sewage systems at far above a reason- 
able cost. The cost of maintaining these works, the cost 
of keeping in order great masses of people and traffic is 
greater than the advantages derived from community life. 
The modern city has been prodigal, it is to-day bankrupt, 
and to-morrow it will cease to be. 

The provision of a great amount of cheap and con- 
venient power — not all at once, but as it may be used — will 
do more than anything else to bring about the balancing 
of life and the cutting of the waste which breeds poverty. 
There is no single source of power. It may be that gener- 
lating electricity by a steam plant at the mine mouth will 
be the most economical method for one community. 
Hydro-electric power may be best for another community. 
But certainly in every community there ought to be a 
central station to furnish cheap power — ^it ought to be held 
as essential as a railway or a water supply. And we 
could have every great source of power harnessed and 
working for the common good were it not that the expense 
of obtaining capital stands in the way. I think that we 
shall have to revise some of our notions about capital. 

Capital that a business makes for itself, that is employed 
to expand the workman's opportunity and increase bis 
comfort and prosperity, and that is used to give more and 
more men work, at the same time reducing the cost of 
service to the public — that sort of capital, even though 
it be under single control, is not a menace to humanity. 
It is a working surplus held in trust and daily use for the 
benefit of all. The holder of such capital can scarcely 


regard it as a personal reward. No man can view such a 
surplus as his own, for he did not create it alone. It is the 
joint product of his whole organization. The owner's 
idea may have released all the energy and direction, but 
certainly it did not supply all the energy and direction. 
Every workman was a partner in the creation. No 
business can possibly be considered only with reference 
to to-day and to the individuals engaged in it. It must 
have the means to carry on. The best wages ought to be 
paid. A proper living ought to be assured every partici- 
pant in the business — no matter what his part. But, 
for the sake of that business's ability to support those 
who work in it, a surplus has to be held somewhere. The 
truly honest manufacturer holds his surplus profits in 
that trust. Ultimately it does not matter where this 
surplus be held nor who controls it; it is its use that matters. 
Capital that is not constantly creating more and better 
jobs is more useless than sand. Capital that is not 
constantly making conditions of daily labour better and 
the reward of daily labour more just, is not fulfilling its 
highest function. The highest use of capital is not to 
make more money, but to make money do more service for 
the betterment of life. Unless we in our industries are 
helping to solve the social problem, we are not doing our 
principal work. We are not fully serving. 


The Tractor and Power Farming 

r' IS not generally known that our tractor, which we 
call the "Fordson," was put into production about a 
year before we had intended, because of the Allies' 
war-time food emergency, and that all of our early pro- 
duction (aside, of course, from the trial and experimental 
machines) went directly to England. We sent in all five 
thousand tractors across the sea in the critical 1917-18 
period when the submarines were busiest. Every one of 
them arrived safely, and ofiicers of the British Govern- 
ment have been good enough to say that without their aid 
England could scarcely have met its food crisis. 

It was these tractors, run mostly by women, that 
ploughed up the old estates and golf courses and let all 
England be planted and cultivated without taking away 
from the fighting man power or crippling the forces in the 
munition factories. 

It came about in this way: The English food adminis- 
tration, about the time that we entered the war in 1917, 
saw that, with the German submarines torpedoing a 
freighter almost every day, the already low supply of 
shipping was going to be totally inadequate to carry the 
American troops across the seas, to carry the essential 
mimitions for these troops and the Allies, to carry the food 
for the fighting forces, and at the same time carry enough 
food for the home population of England. It was then 
that they began shipping out of England the wives and 
famihes of the colonials and made plans for the growing of 
crops at home. The situation was a grave one. There 



were not enough draft animals in all England to plough and 
cultivate land to raise crops in sufficient volume to make 
even a dent in the food imports. Power farming was 
scarcely known, for the English farms were not, before the 
war, big enough to warrant the purchase of heavy, ex- 
pensive farm machinery, and especially with agricultural 
labour so cheap and plentiful. Various concerns in 
England made tractors, but they were heavy affairs and 
mostly run by steam. There were not enough of them 
to go around. More could not easily be made, for all the 
factories were working on munitions, and even if they had 
been made they were too big and clumsy for the average 
field and in addition required the management of engineers. 
We had put together several tractors at our Man- 
chester plant for demonstration purposes. They had been 
made in the United States and merely assembled in 
England. The Board of Agriculture requested the Royal 
Agricultural Society to make a test of these tractors and 
O'cport. This is what they reported: 

At the request of the Royal Agricultural Society of England, we 
have examined two Ford tractors, rated at 25 h. p., at work plough- 

First, cross-ploughing a fallow of strong land in a dirty condition, 
and subsequently in a field of lighter land which had seeded itself 
down into rough grass, and which afforded every opportunity of test- 
ing the motor on the level and on a steep hill. 

In the first trial, a 2-furrow Oliver plough was used, ploughing on 
an average 5 inches deep with a 16-inch wide furrow; a 3-fiUTOW 
Cockshutt plough was also used at the same depth with the breast 
pitched 10 inches. 

In the second trial, the 3-furrow plough was used, ploughing an 
average of 6 inches deep. 

In both cases the motor did its work with ease, and on a measured 
acre the time occupied was 1 hour 30 minutes, with a consumption 
of 2^ gallons of paraffin per acre. 

These results we consider very satisfactory. 

The ploughs were not quite smtable to the land, and the tractors, 
consequently, were working at some disadvantage. 


The total weight of the tractor fully loaded with fuel and water, 
as weighed by us, was 23^ cwts. 

The tractor is light for its power, and, consequently, light on the 
land, is easily handled, turns in a small circle, and leaves a very narrow 

The motor is quickly started up from cold on a small supply of 

After these trials we proceeded to Messrs. Ford's works at TrafiFord 
Park, Manchester, where one of the motors had been sent to be 
dismantled and inspected in detail. 

We find the design of ample strength, and the work of first-rate 
quahty. We consider the driving-wheels rather light, and we under- 
stand that a new and stronger pattern is to be supplied in future. 

The tractor is designed purely for working on the land, and the 
wheels, which are fitted with spuds, should be provided with some 
protection to enable them to travel on the road when moving from 
farm to farm. 

Bearing the above points in mind, we recommend, under existing 
circumstances, that steps be taken to construct immediately as many 
of these tractors as possible. 

The report was signed by Prof. W. E. Dalby and F. S. 
Courtney, engineering; R. N. Greaves, engineering and 
agriculture; Robert W. Hobbs and Henry Overman, agri- 
culture; Gilbert Greenall, honorary directors, and John E. 
Cross, steward. 

Almost immediately after the filing of that report we 
received the following wire : 

Have not received anything definite concerning shipment neces- 
sary steel and plant for Cork factory. Under best circumstances 
however Cork factory production could not be available before next 
spring. The need for food production in England is imperative and 
large quantity of tractors must be available at earliest possible date 
for purpose breaking up existing grass land and ploughing for Fall 
wheat. Am requested by high authorities to appeal to Mr. Ford for 
help. Would you be willing to send Sorensen and others with draw- 
ings of everything necessary, loaning them to British Government 
so that parts can be manufactured over here and assembled in Gov- 
ernment factories under Sorensen's guidance.'' Can assure you 
positively this suggestion is made in national interest and if carried 
out wiU be done by the Government for the people with no manufac- 
turing or capitalist interest invested and no profit being made by any 


interests whatever. The matter is very urgent. Impossible to ship 
anything adequate from America because many thousand tractors 
must be provided. Ford Tractor considered best and only suitable 
design. Consequently national necessity entirely dependent Mr. 
Ford's design. My work prevents me coming America to present the 
proposal personally. Urge favourable consideration and immediate 
decision because every day is of vital importance. You may rely on 
manufacturing facility for production here under strictest impartial 
Government control. Would welcome Sorensen and any and every 
other assistance and guidance you can furnish from America. Cable 
reply, Perry, Care of Harding "Prodome," London. 


I understand that its sending was directed by the 
British Cabinet. We at once cabled our entire willing- 
ness to lend the drawings, the benefit of what experience 
we had to date, and whatever men might be necessary to 
get production under way, and on the next ship sent 
Charles E. Sorensen with full drawings. Mr. Sorensen had 
opened the Manchester plant and was familiar with 
English conditions. He was in charge of the manufacture 
of tractors in this country. 

Mr. Sorensen started at work with the British officials to 
the end of having the parts made and assembled in Eng- 
land. IMany of the materials which we used were special 
and could not be obtained in England. All of their 
factories equipped for doing casting and machine work 
were filled with munition orders. It proved to be exceed* 
ingly difficult for the Ministry to get tenders of any kind. 
Then came June and a series of destructive air raids on 
London. There was a crisis. Something had to be done, 
and finally, after passing to and fro among half the facto- 
ries of England, our men succeeded in getting the tenders 
lodged with the Ministry. 

Lord Milner exhibited these tenders to Mr. Sorensen. 
Taking the best of them the price per tractor came to 
about $1,500 without any guarantee of delivery. 

"That price is out of all reason," said Mr. Sorensen 


"These should not cost more than $700 apiece." 

"Can you make five thousand at that price?" asked 
liOrd Milner. 

"Yes," answered Mr. Sorensen. 
"How long will it take you to deliver them?" 
"We will start shipping within sixty days. " 
They signed a contract on the spot, which, among other 
things, provided for an advance payment of 25 per cent, 
of the total sum. Mr. Sorensen cabled us what he had 
done and took the next boat home. The ^ per cent, 
payment was, by the way, not touched by us until after 
the entire contract was completed: we deposited it in a 
kind of trust fund. 

The tractor works was not ready to go into production. 
The Highland Park plant might have been adapted, but 
every machine in it was going day and night on essential 
war work. There was only one thing to do. We ran up 
an emergency extension to our plant at Dearborn, 
equipped it with machinery that was ordered by tele- 
graph and mostly came by express, and in less than sixty 
days the first tractors were on the docks in New York 
in the hands of the British authorities. They delayed 
in getting cargo space, but on December 6, 1917, we re- 
ceived this cable: 

London, December 5, 1917. 

Fordson, F. R. Dearborn. 

First tractors arrived, when will Smith and others leave. Cable. 


The entire shipment of five thousand tractors went 
through within three months and that is why the tractors 
were being used in England long before they were reaUy 
known in the United States. 

The planning of the tractor really antedated that of the 
motor car. Out on the farm my first experiments were 


with tractors, and it will be remembered that I was em- 
ployed for some time by a manufacturer of steam tractors 
— ^the big heavy road and thresher engines. But I did 
not see any future for the large tractors. They were too 
expensive for the small farm, required too much skill to 
operate, and were much too heavy as compared with the 
pull they exerted. And anyway, the public was more 
interested in being carried than in being pulled ; the horse- 
less carriage made a greater appeal to the imagination. 
And so it was that I practically dropped work upon a 
tractor until the automobile was in production. With 
the automobile on the farms, the tractor became a 
necessity. For then the farmers had been introduced to 

The farmer does not stand so much in need of new toola 
as of power to run the tools that he has. I have followed 
many a weary mile behind a plough and I know all the 
drudgery of it. What a waste it is for a human being to 
spend hours and days behind a slowly moving team of 
horses when in the same time a tractor could do six times 
as much work! It is no wonder that, doing everything 
slowly and by hand, the average farmer has not been able 
to earn more than a bare living while farm products are 
never as plentiful and cheap as they ought to be. 

As in the automobile, we wanted power — ^not weight. 
The weight idea was firmly fixed in the minds of tractor 
makers. It was thought that excess weight meant excess 
pulling power — ^that the machine could not grip unless it 
were heavy. And this in spite of the fact that a cat has 
not much weight and is a pretty good climber. I have 
already set out my ideas on weight. The only kind of 
tractor that I thought worth working on was one that 
would be light, strong, and so simple that any one could 
run it. Also it had to be so cheap that any one could buy 


With these ends in view, we worked for nearly fifteen 
years on a design and spent some millions of dollars in 
experiments. We followed exactly the same course as 
with the automobile. Each part had to be as strong as it 
was possible to make it, the parts had to be few in number, 
and the whole had to admit of quantity production. We 
had some thought that perhaps the automobile engine 
might be used and we conducted a few experiments with it. 
But finally we became convinced that the kind of tractor 
we wanted and the automobile had practically nothing in 
common. It was the intention from the beginning that 
the tractor should be made as a separate undertaking from 
the automobile and in a distinct plant. No plant is big 
enough to make two articles. 

The automobile is designed to carry; the tractor is de- 
signed to pull — ^to climb. And that difference in function 
made all the difference in the world in construction. The 
hard problem was to get bearings that would stand up 
against the heavy pull. We finally got them and a con- 
struction which seems to give the best average perform- 
ance under all conditions. We fixed upon a four-cylinder 
engine that is started by gasoline but runs thereafter on 
kerosene. The lightest weight that we could attain with 
strength was 2,425 pounds. The grip is in the lugs on the 
driving wheels — as in the claws of the cat. 

In addition to its strictly pulling functions, the tractor, 
to be of the greatest service, had also to be designed for 
work as a stationary engine so that when it was not out on 
the road or in the fields it might be hitched up with a belt 
to run machinery. In short, it had to be a compact, 
versatile power plant. And that it has been. It has not 
only ploughed, harrowed, cultivated, and reaped, but it has 
also threshed, run grist mills, saw mills, and various other 
sorts of mills, pulled stumps, ploughed snow, and done 
about everything that a plant of moderate power could do 


from sheep-shearing to printing a newspaper. It has been 
fitted with heavy tires to haul on roads, with sledge 
runners for the woods and ice, and with rimmed wheels 
to run on rails. When the shops in Detroit were shut 
down by coal shortage, we got out the Dearborn Inde- 
pendent by sending a tractor to the electro -typing factory — 
stationing tlie tractor in the alley, sending up a belt four 
stories, and making the plates by tractor power. Its use 
in ninety-five distinct lines of service has been called to 
our attention, and probably we know only a fraction of the 

The mechanism of the tractor is even more simple than 
that of the automobile and it is manufactured in exactly 
the same fashion. Until the present year, the production 
has been held back by the lack of a suitable factory. The 
first tractors had been made in the plant at Dearborn 
which is now used as an experimental station. That wasr 
not large enough to affect the economies of large-scale 
production and it could not well be enlarged because 
the design was to make the tractors at the River Rouge 
plant, and that, until this year, was not in full oper-" 

Now that plant is completed for the making of tractors. 
The work flows exactly as with the automobiles. Each 
part is a separate departmental undertaking and each part 
as it is finished joins the conveyor system which leads it to 
its proper initial assembly and eventually into the final 
assembly. Everything moves and there is no skilled 
work. The capacity of the present plant is one million 
tractors a year. That is the number we expect to make — 
for the world needs inexpensive, general-utility power 
plants more now than ever before — and also it now knows 
enough about machinery to want such plants. 

The first tractors, as I have said, went to England. 
They were first offered in the United States. in 1918 at 


$750. In the next year, with the higher costs, the price 
had to be made $885; in the middle of the year it was 
possible again to make the introductory price of $750. 
In 1920 we charged $790; in the next year we were suffi- 
ciently familiar with the production to begin cutting. 
The price came down to $625 and then in 1922 with the 
River Rouge plant functioning we were able to cut to $395. 
All of which shows what getting into scientific production 
will do to a price. Just as I have no idea how cheaply 
the Ford automobile can eventually be made, I have 
no idea how cheaply the tractor can eventually be 

It is important that it shall be cheap. Otherwise power 
will not go to all the farms. And they must all of them 
have power. Within a few years a farm depending solely 
on horse and hand power will be as much of a curiosity 
as a factory run by a treadmill. The farmer must either 
take up power or go out of business. The cost figures 
make this inevitable. During the war the Government 
made a test of a Fordson tractor to see how its costs 
compared with doing the work with horses. The figures 
on the tractor were taken at the high price plus freight. 
The depreciation and repair items are not so great as the 
report sets them forth, and even if they were, the prices are 
cut in halves which would therefore cut the depreciation 
and repair charge in halves. These are the figures: 


HOUR, 3,840 ACRES 

3,840 acres at $880; depreciation per acre 221 

Repairs for 3,840 acres, $100; per acre 026 

Fuel cost, kerosene at 19 cents; 2 gal. per acre 38 

f gal. oil per 8 acres; per acre 075 

Driver, $2 per day, 8 acres; per acre 25 

Cost of ploughing with Fordson; per acre. . . . .95 



4,000 acres at $1,200, depreciation of horses, per acre . . .30 

Feed per horse, 40 cents (100 working days) per acre. . . .40 

Feed per horse, 10 cents a day (265 idle days) per acre . . . 265 

Two drivers, two gang ploughs, at $2 each per day, per acre . .50 

Cost of ploughing with horses; per acre . . . . 1.46 

At present costs, an acre would run about 40 cents only two cents 
representing depreciation and repairs. But this does not take ac- 
count of the time element. The ploughing is done in about one 
fourth the time, with only the physical energy used to steer the 
tractor. Ploughing has become a matter of motoring across a field. 

Farming in the old style is rapidly fading into a pictur- 
esque memory. This does not mean that work is going to 
remove from the farm. Work cannot be removed from 
any life that is productive. But power-farming does mean. 
this — drudgery is going to be removed from the farm., 
Power-farming is simply taking the burden from flesh and 
blood and putting it on steel. We are in the opening years 
of power-farming. The motor car wrought a revolution 
in modern farm life, not because it was a vehicle, but 
because it had power. Farming ought to be something 
more than a rural occupation. It ought to be the business 
of raising food. And when it does become a business the 
actual work of farming the average sort of farm can be 
done in twenty -four days a year. The other days can be 
given over to other kinds of business. Farming is too 
seasonal an occupation to engage all of a man's time. 

As a food business, farming will justify itself as a business 
if it raises food in sujfficient quantity and distributes it 
under such conditions as will enable every family to have 
enough food for its reasonable needs. There could not be 
a food trust if we were to raise such overwhelming quanti- 
ties of all kinds of food as to make manipulation and ex- 


ploitation impossible. The farmer who limits his plant- 
ing plays into the hands of the speculators. 

And then, perhaps, we shall witness a revival of the 
small flour-milling business. It was an evil day when the 
village flour mill disappeared. Cooperative farming 
will become so developed that we shall see associations 
of farmers with their own packing houses in which their 
own hogs will be turned into ham and bacon, and with 
their own flour mills in which their grain will be turned 
into commercial foodstuffs. 

Why a steer raised in Texas should be brought to 
Chicago and then served in Boston is a question that 
cannot be answered as long as all the steers the city needs 
could be raised near Boston. The centralization of food 
manufacturing industries, entailing enormous costs for 
transportation and organization, is too wasteful long to 
continue in a developed community. 

We shall have as great a development in farming during 
the next twenty years as we have had in manufacturing 
during the last twenty. 


Why Charity? 

WHY should there be any necessity for alms- 
giving in a civilized community? It is not the 
charitable mind to which I object. Heaven forbid 
that we should ever grow cold toward a fellow creature in 
need. Human sympathy is too fine for the cool, calculat- 
ing attitude to take its place. One can name very few 
great advances that did not have human sympathy behind 
them. It is in order to help people that every notable 
service is undertaken. 

The trouble is that we have been using this great, fine 
motive force for ends too small. If human sympathy 
prompts us to feed the hungry, why should it not give 
the larger desire — ^to make hunger in our midst impossible? 
If we have sympathy enough for people to help them out 
of their troubles, surely we ought to have sympathy 
enough to keep them out. 

It is easy to give ; it is harder to make giving unnecessary. 
To make the giving unnecessary we must look beyond 
the individual to the cause of his misery — ^not hesitating, 
of course, to relieve him in the meantime, but not stopping 
with mere temporary relief. The diflBculty seems to be 
in getting to look beyond to the causes. More people 
can be moved to help a poor family than can be moved 
to give their minds toward the removal of poverty alto- 

I have no patience with professional charity or with 
any sort of commercialized humanitarianism. The mo- 
ment human helpfulness is systematized, organized, 



commercialized, and professionalized, the heart of it 
is extinguished, and it becomes a cold and clammy 

Real human helpfulness is never card-catalogued or 
advertised. There are more orphan children being cared 
for in the private homes of people who love them than 
in the institutions. There are more old people being 
sheltered by friends than you can find in the old people's 
homes. There is more aid by loans from family to family 
than by the loan societies. That is, human society on a 
humane basis looks out for itself. It is a grave question 
how far we ought to countenance the commercialization 
of the natural instinct of charity. 

Professional charity is not only cold but it hurts more 
than it helps. It degrades the recipients and drugs their 
self-respect. Akin to it is sentimental idealism. The idea 
went abroad not so many years ago that "service" was 
something that we should expect to have done for us. 
Untold numbers of people became the recipients of well- 
meant "social service." Whole sections of our popula- 
tion were coddled into a state of expectant, child-like 
helplessness. There grew up a regular profession of 
doing things for people, which gave an outlet for a 
laudable desire for service, but which contributed nothing 
whatever to the self-reliance of the people nor to the 
correction of the conditions out of which the supposed 
need for such service grew. 

Worse than this encouragement of childish wistfulness, 
instead of training for self-reliance and self-sufficiency, was 
the creation of a feeling of resentment which nearly always 
overtakes the objects of charity. People often complain 
of the "ingratitude" of those whom they help. Nothing 
is more natural. In the first place, precious little of our 
so-called charity is ever real charity, offered out of a heart 
full of interest and sympathy. In the second place, no 


person ever relishes being in a position where he is forced 
to take favours. 

Such "social work" creates a strained relation — ^the 
recipient of bounty feels that he has been belittled in the 
taking, and it is a question whether the giver should not 
also feel that he has been belittled in the giving. Charity 
never led to a settled state of affairs. The charitable 
system that does not aim to make itself unnecessary is not 
performing service. It is simply making a job for itself 
and is an added item to the record of non-production. 

Charity becomes unnecessary as those who seem to be 
unable to earn livings are taken out of the non-pro- 
ductive class and put into the productive. In a previous 
chapter I have set out how experiments in our shops have 
demonstrated that in sufficiently subdivided industry 
there are places which can be filled by the maimed, the 
halt, and the blind. Scientific industry need not be a 
monster devouring all who come near it. When it is, 
then it is not fulfilling its place in life. In and out of in- 
dustry there must be jobs that take the full strength of 
a powerful man; there are other jobs, and plenty of them, 
that require more skill than the artisans of the Middle Ages 
ever had. The minute subdivision of industry permits 
a strong man or a skilled man always to use his strength 
or skill. In the old hand industry, a skilled man spent a 
good part of his time at unskilled work. That was a waste. 
But since in those days every task required both skilled 
and unskilled labour to be performed by the one man, 
there was httle room for either the man who was too stupid 
ever to be skilled or the man who did not have the 
opportunity to learn a trade. 

No mechanic working with only his hands can earn 
more than a bare sustenance. He cannot have a surplus. 
It has been taken for granted that, coming into old age, 
a mechanic must be supported by his children or, if he has 


no children, that he will be a public charge. All of that is 
quite unnecessary. The subdivision of industry opens 
places that can be filled by practically any one. There 
are more places in subdivision industry that can be filled 
by blind men than there are blind men. There are more 
places that can be filled by cripples than there are cripples. 
And in each of these places the man who short-sightedly 
might be considered as an object of charity can earn just 
as adequate a living as the keenest and most able-bodied. 
It is waste to put an able-bodied man in a job that might 
be just as well cared for by a cripple. It is a frightful 
waste to put the blind at weaving baskets. It is waste to 
have convicts breaking stone or picking hemp or doing any 
sort of petty, useless task. 

A well-conducted jail should not only be self-supporting, 
but a man in jail ought to be able to support his family or, 
if he has no family, he should be able to accumulate a sum 
of money sufficient to put him on his feet when he gets out 
of jail. I am not advocating convict labour or the farming 
out of men practically as slaves. Such a plan is too 
detestable for words. We have greatly overdone the 
prison business, anyway; we begin at the wrong end. But 
as long as we have prisons they can be fitted into the gen- 
eral scheme of production so neatly that a prison may be- 
come a productive unit working for the relief of the public 
and the benefit of the prisoners. I know that there are 
laws — ^foolish laws passed by unthinking men — that re- 
strict the industrial activities of prisons. Those laws were 
passed mostly at the behest of what is called Labour. They 
are not for the benefit of the vv^orkingman. Increasing 
the charges upon a community does not benefit any one 
in the community. If the idea of service be kept in mind, 
then there is always in every commimity more work to do 
than there are men who can do it. 

Industry organized for service removes the need for 


philanthropy. Philanthropy, no matter how noble its 
motive, does not make for self-reliance. We must have 
self-reliance. A community is the better for being dis* 
contented, for being dissatisfied with what it has. I do not 
mean the petty, daily, nagging, gnawing sort of discontent, 
but a broad, courageous sort of discontent which believes 
that everything which is done can and ought to be 
eventually done better. Industry organized for service — ■ 
and the workingman as well as the leader must serve — can 
pay wages sufficiently large to permit every family to be 
both self-reliant and self-supporting. A philanthropy 
that spends its time and money in helping the world to do 
more for itself is far better than the sort which merely 
gives and thus encourages idleness. Philanthropy, like 
everything else, ought to be productive, and 1 believe that 
it can be. I have personally been experimenting with a 
trade school and a hospital to discover if such institutions, 
which are commonly regarded as benevolent, cannot be 
made to stand on their own feet. I have found that they 
can be. 

I am not in sympathy with the trade school as it is 
commonly organized — ^the boys get only a smattering of 
knowledge and they do not learn how to use that knowl- 
edge. The trade school should not be a cross between a 
technical college and a school; it should be a means of 
teaching boys to be productive. If they are put at useless 
tasks — at making articles and then throwing them away — 
they cannot have the interest or acquire the knowledge 
which is their right. And during the period of schooling 
the boy is not productive; the schools — ^unless by charity 
— ^make no provision for the support of the boy. Many 
boys need support ; they must work at the first thing which 
comes to hand. They have no chance to pick and choose. 

When the boy thus enters life untrained, he but adds 
lo the already great scarcity of competent labour. Modern 


industry requires a degree of ability and skill which 
neither early quitting of school nor long continuance at 
school provides. It is true that, in order to retain the 
interest of the boy and train him in handicraft, manual 
training departments have been introduced in the more 
progressive school systems, but even these are confessedly 
makeshifts because they only cater to, without satisfying^ 
the normal boy's creative instincts. 

To meet this condition — ^to fulfill the boy's educational 
possibilities and at the same time begin his industrial 
training along constructive lines — ^the Henry Ford Trade 
School was incorporated in 1916. We do not use the word 
philanthropy in connection with this effort. It grew out of a 
desire to aid the boy whose circumstances compelled him 
to leave school early. This desire to aid fitted in con- 
veniently with the necessity of providing trained tool- 
makers in the shops. From the beginning we have held 
to three cardinal principles: first, that the boy was to 
be kept a boy and not changed into a premature working- 
man; second, that the academic training was to go hand 
in hand with the industrial instruction; third, that the 
boy was to be given a sense of pride and responsibility in 
his work by being trained on articles which were to be 
used. He works on objects of recognized industrial worth. 
The school is incorporated as a private school and is open 
to boys between the ages of twelve and eighteen. It is 
organized on the basis of scholarships and each boy is 
awarded an annual cash scholarship of four hundred dollars 
at his entrance. This is gradually increased to a maximum 
of six hundred dollars if his record is satisfactory. 

A record of the class and shop work is kept and also of 
the industry the boy displays in each. It is the marks in 
industry which are used in making subsequent adjust- 
ments of his scholarship. In addition to his scholarship 
each boy is given a small amount each month which must 


be deposited in his savings account. This thrift fund must 
be left in the bank as long as the boy remains in the school 
unless he is given permission by the authorities to use it 
for an emergency. 

One by one the problems of managing the school are 
being solved and better ways of accomplishing its objects 
are being discovered. At the beginning it was the custom 
to give the boy one third of the day in class work and two 
thirds in shop work. This daily adjustment was found to 
be a hindrance to progress, and now the boy takes his 
training in blocks of weeks — one week in the class and 
two weeks in the shop. Classes are continuous, the 
various groups taking their weeks in turn. 

The best instructors obtainable are on the staff, and thft 
text-book is the Ford plant. It offers more resources for 
practical education than most universities. The arith- 
metic lessons come in concrete shop problems. No longer 
is the boy's mind tortured with the mysterious A who can 
row four miles while B is rowing two. The actual processes 
and actual conditions are exhibited to him — ^he is taught 
to observe. Cities are no longer black specks on maps 
and continents are not just pages of a book. The shop 
shipments to Singapore, the shop receipts of material from 
Africa and South America are shown to him, and the 
world becomes an inhabited planet instead of a coloured 
globe on the teacher's desk. In physics and chemistry 
the industrial plant provides a laboratory in which theory 
becomes practice and the lesson becomes actual experience. 
Suppose the action of a pump is being taught. The teach- 
er explains the parts and their functions, answers ques- 
tions, and then they all troop away to the engine rooms 
to see a great pump. The school has a regular factory 
workshop with the finest equipment. The boys work up 
from one machine to the next. They work solely on 
parts or articles needed by the company, but our needs ai-e 


so vast that this Hst comprehends nearly everything. 
The inspected work is purchased by the Ford Motor 
Company, and, of course, the work that does not pass 
inspection is a loss to the school. 

The boys who have progressed furthest do fine micro- 
meter work, and they do every operation with a clear 
understanding of the purposes and principles involved. 
They repair their own machines; they learn how to take 
care of themselves around machinery; they study pattern- 
making and in clean, well-lighted rooms with their instruct- 
ors they lay the foundation for successful careers. 

TVTien they graduate, places are always open for them in 
the shops at good wages. The social and moral well-being 
of the boys is given an unobtrusive care. The super- 
vision is not of authority but of friendly interest. The 
home conditions of every boy are pretty well known, and 
his tendencies are observed. And no attempt is made 
to coddle him. No attempt is made to render him 
namby-pamby. One day when two boys came to the 
point of a fight, they were not lectured on the wickedness 
of fighting. They were counselled to make up their 
differences in a better way, but when, boy-like, they pre- 
ferred the more primitive mode of settlement, they were 
given gloves and made to fight it out in a corner of the 
shop. The only prohibition laid upon them was that 
they were to finish it there, and not to be caught fighting 
outside the shop. The result was a short encounter and — 

They are handled as boys; their better boyish instincts 
are encouraged; and when one sees them in the shops and 
classes one cannot easily miss the light of dawning mastery 
in their eyes. They have a sense of "belonging.'* They 
feel they are doing something worth while. They learn 
readily and eagerly because they are learning the things 
which every active boy wants to learn and about which he 


is constantly asking questions that none of his home* 
folks can answer. 

Beginning with six boys the school now has two hundred 
and is possessed of so practical a system that it may 
expand to seven hundred. It began with a deficit, but as 
it is one of my basic ideas that anything worth while in 
itself can be made self-sustaining, it has so developed its 
processes that it is now paying its way. 

We have been able to let the boy have his boyhood. 
These boys learn to be workmen but they do not forget 
how to be boys. That is of the first importance. They, 
earn from 19 to 35 cents an hour — ^which is more than they 
could earn as boys in the sort of job open to a youngster. 
They can better help support their families by staying 
in school than by going out to work. When they are 
through, they have a good general education, the begin- 
ning of a technical education, and they are so skilled as 
workmen that they can earn wages which will give 
them the liberty to continue their education if they like. 
If they do not want more education, they have at least the 
skill to command high wages anywhere. They do not 
have to go into our factories; most of them do because 
they do not know where better jobs are to be had — ^we 
want all our jobs to be good for the men who take them. 
But there is no string tied to the boys. They have earned 
their own way and are under obligations to no one. There 
is no charity. The place pays for itself. 

The Ford Hospital is being worked out on somewhat 
similar lines, but because of the interruption of the war — 
when it was given to the Government and became 
General Hospital No. 36, housing some fifteen hundred 
patients — ^the work has not yet advanced to the point of 
absolutely definite results. I did not deliberately set out 
to build this hospital. It began in 1914 as the Detroit 
General Hospital and was designed to be erected by 


popular subscription. With others, I made a subscrip- 
tion, and the building began. Long before the first 
buildings were done, the funds became exliausted and I 
was asked to make another subscription. I refused 
because I thought that the managers should have known 
how much the building was going to cost before they 
started. And that sort of a beginning did not give great 
confidence as to how the place would be managed after 
it was finished. However, I did offer to take the whole 
hospital, paying back all the subscriptions that had been 
made. This was accomplished, and we were going 
forward with the work when, on August 1, 1918, the whole 
institution was turned over to the Government. It was 
returned to us in October, 1919, and on the tenth day of 
November of the same year the first private patient was 

The hospital is on West Grand Boulevard in Detroit and 
the plot embraces twenty acres, so that there will be ample 
room for expansion. It is our thought to extend the 
facilities as they justify themselves. The original design 
of the hospital has been quite abandoned and we have 
endeavoured to work out a new kind of hospital, both in 
design and management. There are plenty of hospitals 
for the rich. There are plenty of hospitals for the poor. 
There are no hospitals for those who can afford to pay 
only a moderate amount and yet desire to pay without a 
feeling that they are recipients of charity. It has been 
taken for granted that a hospital cannot both serve 
and be self-supporting — ^that it has to be either an in- 
stitution kept going by private contributions or pass into 
the class of private sanitariums managed for profit. 
iThis hospital is designed to be self-supporting — ^to give 
a maximum of service at a minimum of cost and without 
the slightest colouring of charity. 

In the new buildings that we have erected there are no 


wards. All of the rooms are private and each one is pro- 
vided with a bath. The rooms — which are in groups of 
twenty-four — are all identical in size, in fittings, and in 
furnishings. There is no choice of rooms. It is planned 
that there shall be no choice of anything within the hos- 
pital. Every patient is on an equal footing with every 
other patient. 

It is not at all certain whether hospitals as they are now 
managed exist for patients or for doctors. I am not 
unmindful of the large amount of time which a capable 
physician or surgeon gives to charity, but also I am not 
convinced that the fees of surgeons should be regulated 
according to the wealth of the patient, and I am entirely 
convinced that what is known as "professional etiquette" 
is a curse to mankind and to the development of medi- 
cine. Diagnosis is not very much developed. I should 
not care to be among the proprietors of a hospital in which 
every step had not been taken to insure that the patients 
were being treated for what actually was the matter with 
them, instead of for something that one doctor had de- 
cided they had. Professional etiquette makes it very 
difiicult for a wrong diagnosis to be corrected. The 
consulting physician, unless he be a man of great tact, 
will not change a diagnosis or a treatment unless the phy- 
sician who has called him in is in thorough agreement, and 
then if a change be made, it is usually without the knowl- 
edge of the patient. There seems to be a notion that a 
patient, and especially when in a hospital, becomes the 
property of the doctor. A conscientious practitioner 
does not exploit the patient. A less conscientious one 
does. Many physicians seem to regard the sustaining 
of their own diagnoses as of as great moment as the re- 
covery of the patient. 

It has been an aim of our hospital to cut away from all 
of these practices and to put the interest of the patient 


first. Therefore, it is what is known as a "closed" 
hospital. All of the physicians and all of the nurses are 
employed by the year and they can have no practice 
outside of the hospital. Including the internes, twenty- 
one physicians and surgeons are on the staff. These men 
have been selected with great care and they are paid 
salaries that amount to at least as much as they would 
ordinarily earn in successful private practice. They have, 
none of them, any financial interest whatsoever in any 
patient, and a patient may not be treated by a doctor 
from the outside. We gladly acknowledge the place and 
the use of the family physician. We do not seek to sup- 
plant him. We take the case where he leaves off, and re- 
turn the patient as quickly as possible. Our system makes 
it undesirable for us to keep patients longer than neces- 
sary — we do not need that kind of business. And we will 
share with the family physician our knowledge of the case, 
but while the patient is in the hospital we assume full re- 
sponsibility. It is "closed" to outside physicians' prac- 
tice, though it is not closed to our cooperation with any 
family physician who desires it. 

The admission of a patient is interesting. The incoming 
patient is first examined by the senior physician and then 
is routed for examination through three, four, or whatever 
number of doctors seems necessary. This routing takes 
place regardless of what the patient came to the hospital 
for, because, as we are gradually learning, it is the com- 
plete health rather than a single ailment which is import- 
ant. Each of the doctors makes a complete examination, 
and each sends in his written findings to the head physician 
without any opportunity whatsoever to consult with any of 
the other examining physicians. At least three, and some- 
times six or seven, absolutely complete and absolutely inde- 
pendent diagnoses are thus in the hands of the head of the 
hospital. They constitute a complete record of the case. 


These precautions are taken in order to insure, within 
the limits of present-day knowledge, a correct diagnosis. 

At the present time, there are about six hundred beds 
available. Every patient pays according to a fixed 
schedule that includes the hospital room, board, medical 
and surgical attendance, and nursing. There are no 
extras. There are no private nurses. If a case requires 
more attention than the nurses assigned to the wing can 
give, then another nurse is put on, but without any 
additional expense to the patient. This, however, is 
rarely necessary because the patients are grouped accord- 
ing to the amount of nursing that they will need. There 
may be one nurse for two patients, or one nurse for five 
patients, as the type of cases may require. No one nurse 
ever has more than seven patients to care for, and because 
of the arrangements it is easily possible for a nurse to care 
for seven patients who are not desperately ill. In the 
ordinary hospital the nurses must make many useless 
steps. More of their time is spent in walking than in 
caring for the patient. This hospital is designed to save 
steps. Each floor is complete in itself, and just as in the 
factories we have tried to eliminate the necessity for waste 
motion, so have we also tried to eliminate waste motion in 
the hospital. The charge to patients for a room, nursing, 
and medical attendance is $4.50 a day. This will be 
lowered as the size of the hospital increases. The charge 
for a major operation is $125. The charge for minor oper- 
ations is according to a fixed scale. All of the charges 
are tentative. The hospital has a cost system just like a 
factory. The charges will be regulated to make ends just 

There seems to be no good reason why the experiment 
should not be successful. Its success is purely a matter 
of management and mathematics. The same kind of 
management which permits a factory to give the fullest 


service will permit a hospital to give the fullest service, 
and at a price so low as to be within the reach of everyone. 
The only difference between hospital and factory account- 
ing is that I do not expect the hospital to return a profit ; we 
do expect it to cover depreciation. The investment in this 
hospital to date is about $9,000,000. 

If we can get away from charity, the funds that now go 
into charitable enterprises can be turned to furthering 
production — to making goods cheaply and in great plenty. 
And then we shall not only be removing the burden of 
taxes from the community and freeing men but also we 
can be adding to the general wealth. We leave for 
private interest too many things we ought to do for our- 
selves as a collective interest. We need more construct- 
ive thinking in public service. We need a kind of "uni- 
versal training" in economic facts. The over-reaching 
ambitions of speculative capital, as well as the unreason- 
able demands of irresponsible labour, are due to ignorance 
of the economic basis of life. Nobody can get more out 
of life than life can produce — yet nearly everybody thinks 
he can. Speculative capital wants more; labour wants 
more; the source of raw material wants more; and the pur- 
chasing public wants more. A family knows that it cannot 
live beyond its income; even the children know that. But 
the public never seems to learn that it cannot live beyond 
its income — ^have more than it produces. 

In clearing out the need for charity we must keep in 
mind not only the economic facts of existence, but also 
that lack of knowledge of these facts encourages fear. 
Banish fear and we can have self-reliance. Charity is not 
present where self-reliance dwells. 

Fear is the offspring of a reliance placed on something 
outside — on a foreman's good-will, perhaps, on a shop's 
prosperity, on a market's steadiness. That is just 
another way of saying that fear is the portion of the man 


who acknowledges his career to be in the keeping of 
eartlily circumstances. Fear is the result of the body as- 
suming ascendancy over the soul. 

The habit of failure is purely mental and is the mother 
of fear. This habit gets itself fixed on men because they 
lack vision. They start out to do something that reaches 
from A to Z. At A they fail, at B they stumble, and at C 
they meet with what seems to be an insuperable difficulty. 
They then cry "Beaten" and throw the whole task down. 
They have not even given themselves a chance really to 
fail; they have not given their vision a chance to be proved 
or disproved. They have simply let themselves be beaten 
by the natural difficulties that attend every kind of effort. 

More men are beaten than fail. It is not wisdom they 
need or money, or brilliance, or "pull," but just plain 
gristle and bone. This rude, simple, primitive power which 
we call " stick-to-it-iveness " is the uncrowned king of the 
world of endeavour. People are utterly wrong in their 
slant upon things. They see the successes that men have 
made and somehow they appear to be easy. But that is 
a world away from the facts. It is failure that is easy. 
Success is always hard. A man can fail in ease; he can 
succeed only by paying out all that he has and is. It is 
this which makes success so pitiable a thing if it be in lines 
that are not useful and uplifting. 

If a man is in constant fear of the industrial situation he 
ought to change his life so as not to be dependent upon it. 
There is always the land, and fewer people are on the 
land now than ever before. If a man lives in fear of an 
employer's favour changing toward him, he ought to 
extricate himself from dependence on any employer. 
He can become his own boss. It may be that he will be a 
poorer boss than the one he leaves, and that his returns 
will be much less, but at least he will have rid himself 
of the shadow of his pet fear, and that is worth a great 


deal in money and position. Better still is for the man to 
come through himself and exceed himself by getting rid of 
his fears in the midst of the circumstances where his daily 
lot is cast. Become a freeman in the place where you first 
surrendered your freedom. Win your battle where you 
lost it. And you will come to see that, although there was 
much outside of you that was not right, there was more 
inside of you that was not right. Thus you will learn 
that the wrong inside of you spoils even the right that is 
outside of you. 

A man is still the superior being of the earth. Whatever 
happens, he is still a man. Business may slacken to- 
morrow — he is still a man. He goes through the changes 
of circumstances, as he goes through the variations of 
temperature — still a man. If he can only get this thought 
reborn in him, it opens new wells and mines in his own 
being. There is no security outside of himself. There is 
no wealth outside of himself. The elimination of fear is 
the bringing in of security and supply. 

Let every American become steeled against coddling. 
Americans ought to resent coddling. It is a drug. Stand 
up and stand out; let weaklings take charity. 


The Railroads 

NOTHING in this country furnishes a better ex- 
ample of how a business may be turned from its 
function of service than do the railroads. We 
have a railroad problem, and much learned thought and 
discussion have been devoted to the solution of that 
problem. Everyone is dissatisfied with the railways. 
The public is dissatisfied because both the passenger and 
freight rates are too high. The railroad employees are 
dissatisfied because they say their wages are too low and 
their hours too long. The owners of the railways are 
dissatisfied because it is claimed that no adequate return 
is realized upon the money invested. All of the contacts 
of a properly managed undertaking ought to be satis- 
factory. If the public, the employees, and the owners do 
not find themselves better off because of the undertaking, 
then there must be something very wrong indeed with the 
manner in which the undertaking is carried through. 

I am entirely without any disposition to pose as a rail- 
road authority. There may be railroad authorities, but if 
the service as rendered by the American railroad to-day is 
the result of accumulated railway knowledge, then I cannot 
say that my respect for the usefulness of that knowledge 
is at all profound. I have not the slightest doubt in the 
world that the active managers of the railways, the men 
who really do the work, are entirely capable of conducting 
the railways of the country to the satisfaction of every one, 
and I have equally no doubt that these active managers 
have, by force of a chain of circumstances, all but ceased 



to manage. And right there is the source of most of the 
trouble. The men who know raihoading have not been 
allowed to manage railroads. 

In a previous chapter on finance were set forth the 
dangers attendant upon the indiscriminate borrowing of 
nioney. It is inevitable that any one who can borrow 
freely to cover errors of management will borrow rather 
than correct the errors. Our railway managers have been 
practically forced to borrow, for since the very inception 
of the railways they have not been free agents. The 
guiding hand of the railway has been, not the railroad man, 
but the banker. When railroad credit was high, more 
money was to be made out of floating bond issues and 
speculating in the securities than out of service to the 
public. A very small fraction of the money earned by 
the railways has gone back into the rehabilitation of 
the properties. When by skilled management the net 
revenue became large enough to pay a considerable 
dividend upon the stock, then that dividend was used first 
by the speculators on the inside and controlling the rail- 
road fiscal policy to boom the stock and unload their hold- 
ings, and then to float a bond issue on the strength of the 
credit gained through the earnings. When the earnings 
dropped or were artificially depressed, then the speculat- 
ors bought back the stock and in the course of time 
staged another advance and unloading. There is scarcely 
a railroad in the United States that has not been through 
one or more receiverships, due to the fact that the financial 
interests piled on load after load of securities until the 
structures grew topheavy and fell over. Then they got in 
on the receiverships, made money at the expense of gullible 
security holders, and started the same old pyramiding 
game all over again. 

The natural ally of the banker is the lawyer. Such 
games as have been played on the railroads have needed 


expert legal advice. Lawyers, like bankers, know abso- 
lutely nothing about business. They imagine that a busi- 
ness is properly conducted if it keeps within the law or if 
the law can be altered or interpreted to suit the purpose in 
hand. They live on rules. The bankers took finance out 
of the hands of the managers. They put in lawyers to see 
that the railroads violated the law only in legal fashion, and 
thus grew up immense legal departments. Instead of oper- 
ating under the rules of common sense and according to cir- 
cumstances, every railroad had to operate on the advice 
of counsel. Rules spread through every part of the 
organization. Then came the avalanche of state and 
federal regulations, until to-day we find the railways 
hog-tied in a mass of rules and regulations. With the 
lawyers and the financiers on the inside and various state 
commissions on the outside, the railway manager has little 
chance. That is the trouble with the railways. Business 
cannot be conducted by law. 

We have had the opportunity of demonstrating to 
ourselves what a freedom from the banker-legal mortmain 
means, in our experience with the Detroit, Toledo & Iron- 
ton Railway. We bought the railway because its right of 
way interfered with some of our improvements on the River 
Rouge. We did not buy it as an investment, or as an 
adjunct to our industries, or because of its strategic 
position. The extraordinarily good situation of the rail- 
way seems to have become universally apparent only since 
we bought it. That, however, is beside the point. We 
bought the railway because it interfered with our plans. 
Then we had to do something with it. The only thing 
to do was to run it as a productive enterprise, applying 
to it exactly the same principles as are applied in every 
department of our industries. We have as yet made no 
special efforts of any kind and the railway has not been set 
jup as a demonstration of how every railway should be run. 


It IS true that applying the rule of maximum service 
at minimum cost has caused the income of the road to 
exceed the outgo — ^which, for that road, represents a most 
unusual condition. It has been represented that the 
changes we have made — and remember they have been 
made simply as part of the day's work — ^are peculiarly 
revolutionary and quite without application to railway 
management in general. Personally, it would seem to 
me that our little line does not differ much from the big 
lines. In our own work we have always found that, if our 
principles were right, the area over which they were applied 
did not matter. The principles that we use in the big 
Highland Park plant seem to work equally well in every 
plant that we establish. It has never made any difference 
with us whether we multiplied what we were doing by five 
or five hundred. Size is only a matter of the multiplica- 
tion table, anyway. 

The Detroit, Toledo & Ironton Railway was organized 
some twenty -odd years ago and has been reorganized every 
few years since then. The last reorganization was in 1914. 
The war and the federal control of the railways interrupted 
the cycle of reorganization. The road owns 343 miles of 
track, has 52 miles of branches, and 45 miles of trackage 
rights over other roads. It goes from Detroit almost due 
south to Ironton on the Ohio River, thus tapping the West 
Virginia coal deposits. It crosses most of the large trunk 
lines and it is a road which, from a general business stand- 
point, ought to pay. It has paid. It seems to have paid 
the bankers. In 1913 the net capitalization per mile of 
road was $105,000. In the next receivership this was cut 
down to $47,000 per mile. I do not know how much 
money in all has been raised on the strength of the road. 
I do know that in the reorganization of 1914 the bond- 
holders were assessed and forced to turn into the treasury 
nearly five million dollars — ^which is the amount that we 


paid for the entire road. We paid sixty cents on the dollar 
for the outstanding mortgage bonds, although the ruling 
price just before the time of purchase was between thirty 
and forty cents on the dollar. We paid a dollar a share for 
the common stock and five dollars a share for the preferred 
stock — which seemed to be a fair price considering that 
no interest had ever been paid upon the bonds and a 
dividend on the stock was a most remote possibility. The 
rolling stock of the road consisted of about seventy loco- 
motives, twenty-seven passenger cars, and around twenty- 
eight hundred freight cars. All of the rolling stock was in 
extremely bad condition and a good part of it would not 
run at all. All of the buildings were dirty, unpainted, and 
generally run down. The roadbed was something more 
than a streak of rust and something less than a railway. 
The repair shops were over-manned and under-machined. 
Practically everything connected with operation was con- 
ducted with a maximum of waste. There was, however, 
an exceedingly ample executive and administration de- 
partment, and of course a legal department. The legal 
department alone cost in one month nearly $18,000. 

We took over the road in March, 1921. We began to 
apply industrial principles. There had been an executive 
office in Detroit. We closed that up and put the adminis- 
tration into the charge of one man and gave him half of 
the flat -topped desk out in the freight office. The legal 
department went with the executive offices. There is no 
reason for so much litigation in connection with railroad- 
ing. Our people quickly settled all the mass of outstand- 
ing claims, some of which had been hanging on for years. 
As new claims arise, they are settled at once and on the 
fa(;ts, so that the legal expense seldom exceeds $200 a 
month. All of the unnecessary accounting and red tape 
were thrown out and the payroU of the road was reduced 
from 2,700 to 1,650 men. 


Following our general policy, all titles and offices other 
than those required by law were abolished. The ordinary 
railway organization is rigid; a message has to go up 
through a certain line of authority and no man is ex- 
pected to do anything without explicit orders from his 
superior. One morning I went out to the road very early 
and found a wrecking train with steam up, a crew aboard 
and all ready to start. It had been "awaiting orders'* 
for half an hour. We went down and cleared the wreck 
before the orders came through; that was before the idea 
of personal responsibility had soaked in. It was a little 
hard to break the "orders" habit; the men at first were 
afraid to take responsibility. But as we went on, they 
seemed to like the plan more and more and now no man 
limits his duties. A man is paid for a day's work of 
eight hours and he is expected to work during those eight 
hours. If he is an engineer and finishes a run in four hours 
then he works at whatever else may be in demand for the 
next four hours. If a man works more than eight hours 
he is not paid for overtime — ^he deducts his overtime from 
the next working day or saves it up and gets a whole day 
off with pay. Our eight-hour day is a day of eight hours 
and not a basis for computing pay. 

The minimum wage is six dollars a day. There are no 
extra men. We have cut down in the offices, in the shops, 
and on the roads. In one shop 20 men are now doing 
more work than 59 did before. Not long ago one of our 
track gangs, consisting of a foreman and 15 men, was 
working beside a parallel road on which was a gang of 
40 men doing exactly the same sort of track repairing and 
ballasting. In five days our gang did two telegraph poles 
more than the competing gang ! 

The road is being rehabilitated; nearly the whole track 
has been reballasted and many miles of new rails have 
been laid. The locomotives and rolling stock are being 


overhauled in our own shops and at a very slight expense. 
We found that the supplies bought previously were of poor 
quality or unfitted for the use; we are saving money on 
supplies by buying better qualities and seeing that nothing 
is wasted. The men seem entirely willing to cooperate 
in saving. They do not discard that which might be 
used. We ask a man, "What can you get out of an en- 
gine.^ and he answers with an economy record. And 
we are not pouring in great amounts of money. Every- 
thing is being done out of earnings. That is our pol- 

The trains must go through and on time. The time 
of freight movements has been cut down about two thirds. 
A car on a siding is not just a car on a siding. It is 
a great big question mark. Someone has to know why 
it is there. It used to take 8 or 9 days to get freight 
through to Philadelphia or New York; now it takes three 
and a half days. The organization is serving. 

All sorts of explanations are put forward, of why a 
deficit was turned into a surplus. I am told that it is all 
due to diverting the freight of the Ford industries. If we 
had diverted all of our business to this road, that would not 
explain why we manage at so much lower an operating 
cost than before. We are routing as much as we can of 
our own business over the road, but only because we there 
get the best service. For years past we had been trying to 
send freight over this road because it was conveniently 
located, but we had never been able to use it to any extent 
because of the delayed deliveries. We could not count 
on a shipment to within five or six weeks; that tied 
up too much money and also broke into our production 
schedule. There was no reason why the road should not 
have had a schedule; but it did not. The delays became 
legal matters to be taken up in due legal course; that is 
not the way of business. We think that a delay is a 


criticism of our work and is something at once to be 
investigated. That is business. 

The railroads in general have broken down, and if the 
former conduct of the Detroit, Toledo & Ironton is any 
criterion of management in general there is no reason in 
the world why they should not have broken down. Too 
many railroads are run, not from the offices of practical 
men, but from banking offices, and the principles of pro- 
cedure, the whole outlook, are financial — ^not transporta- 
tional, but financial. There has been a breakdown simply 
because more attention has been paid to railroads as 
factors in the stock market than as servants of the people. 
Outworn ideas have been retained, development has been 
practically stopped, and railroad men with vision have not 
been set free to grow. 

Will a billion dollars solve that sort of trouble.? No, a 
billion dollars will only make the difficulty one billion 
dollars worse. The purpose of the billion is simply to 
continue the present methods of railroad management, 
and it is because of the present methods that we have any 
railroad difficulties at all. 

The mistaken and foolish things we did years ago are 
just overtaking us. At the beginning of railway trans- 
portation in the United States, the people had to be taught 
its use, just as they had to be taught the use of the tele- 
phone. Also, the new railroads had to make business in 
order to keep themselves solvent. And because railway 
fiinancing began in one of the rottenest periods of our busi- 
ness history, a number of practices were established as 
precedents which have influenced railway work ever since. 
One of the first things the railways did was to throttle all 
other methods of transportation. There was the begin- 
ning of a splendid canal system in this country and a great 
movement for canalization was at its height. The rail- 
road companies bought out the canal companies and let 


the canals fill up and choke with weeds and refuse. All 
over the Eastern and in parts of the Middle Western 
states are the remains of this network of internal water- 
ways. They are being restored now as rapidly as possible; 
they are being linked together; various commissions, 
public and private, have seen the vision of a complete 
system of waterways serving all parts of the country, and 
thanks to their efforts, persistence, and faith, progress is 
being made. 

But there was another. This was the system of making 
the haul as long as possible. Any one who is familiar with 
the exposures which resulted in the formation of the Inter- 
state Commerce Commission knows what is meant by 
this. There was a period when rail transport was not re- 
garded as the servant of the travelling, manufacturing, 
and commercial publics. Business was treated as if it 
existed for the benefit of the railways. During this 
period of folly, it was not good railroading to get goods 
from their shipping point to their destination by the most 
direct line possible, but to keep them on the road as long 
as possible, send them around the longest way, give as 
many connecting lines as possible a piece of the profit, and 
let the public stand the resulting loss of time and money. 
That was once counted good railroading. It has not en- 
tirely passed out of practice to-day. 

One of the great changes in our economic life to which 
this railroad policy contributed was the centralization of 
certain activities, not because centralization was neces- 
sary, nor because it contributed to the well-being of the 
people, but because, among other things, it made double 
business for the railroads. Take two staples — meat and 
grain. If you look at the maps which the packing houses 
put out, and see where the cattle are drawn from; and 
then if you consider that the cattle, when converted into 
food, are hauled again by the same raiJways right back to 

Photograph from Euing Galloway 
enormous plant at River Rouge, Michigan, covering i,ioo acres, has its own blast furnaces col 
IS, foundry, machine shops, body plant, sawmill, glass factory, paper mill, more than a mile of do( 
tage, and storage bms for iron ore, coke, and limestone. 



Photograph from Eiving Galloway 

prosperous, says Henry Ford, the majority are so interested in getting the utmost ou 
of the machine that they will give no time to improving it as it runs. 


the place where they came from, you will get some side- 
light on the transportation problem and the price of meat. 
Take also grain. Every reader of advertisements knows 
where the great flour mills of the country are located. 
And they probably know also that these great mills 
are not located in the sections where the grain of the 
United States is raised. There are staggering quantities Oi 
grain, thousands of trainloads, hauled uselessly long dis- 
tances, and then in the form of flour hauled back again 
long distances to the states and sections where the 
grain was raised — a burdening of the railroads whi(5h 
is of no benefit to the communities where the gram 
originated, nor to any one else except the monopo- 
listic mills and the railroads. The railroads can always 
do a big business without helping the business of the 
country at all; they can always be engaged in just 
such useless hauling. On meat and grain and perhaps on 
cotton, too, the transportation burden could be reduced 
by more than half, by the preparation of the product for 
use before it is shipped. If a coal community mined coal 
in Pennsylvania, and then sent it by railway to Michigan 
or Wisconsin to be screened, and then hauled it back 
again to Pennsylvania for use, it would not be much 
sillier than the hauling of Texas beef alive to Chicago, 
there to be killed, and then shipped back dead to Texas; 
or the hauling of Kansas grain to Minnesota, there to be 
ground in the mills and hauled back again as flour. It is 
good business for the railroads, but it is bad business for 
business. One angle of the transportation problem to 
which too few men are paying attention is this useless 
hauling of material. If the problem were tackled from 
the point of ridding the railroads of their useless hauls, we 
might discover that we are in better shape than we think 
to take care of the legitimate transportation business of 
the country. 


In commodities like coal it is necessary that they be 
hauled from where they are to where they are needed. 
The same is true of the raw materials of industry — they 
must be hauled from the place where nature has stored 
them to the place where there are people ready to work 
them. And as these raw materials are not often found 
assembled in one section, a considerable amount of trans- 
portation to a central assembling place is necessary. The 
coal comes from one section, the copper from another, the 
iron from another, the wood from another — they must all 
be brought together. 

But wherever it is possible a policy of decentral- 
ization ought to be adopted. We need, instead of 
mammoth flour mills, a multitude of smaller mills dis- 
tributed through all the sections where grain is grown. 
Wherever it is possible, the section that produces the raw 
material ought to produce also the finished product. 
Grain should be ground to flour where it is grown. A hog- 
growing country should not export hogs, but pork, hams, 
and bacon. The cotton mills ought to be near the cotton 
fields. This is not a revolutionary idea. In a sense it is 
a reactionary one. It does not suggest anything new; it 
suggests something that is very old. This is the way the 
country did things before we fell into the habit of carting 
everything around a few thousand miles and adding the 
cartage to the consumer's bill. Our communities ought 
to be more complete in themselves. They ought not to 
be unnecessarily dependent on railway transportation. 
Out of what they produce they should supply their own 
needs and ship the surplus. And how can they do this 
unless they have the means of taking their raw materials, 
like grain and cattle, and changing them into finished 
products? If private enterprise does not yield these 
means, the cooperation of farmers can. The chief in- 
justice sustained by the farmer to-day is that, being the 


greatest producer, he is prevented from being also the 
greatest merchandiser, because he is compelled to sell to 
those who put his products into merchantable form. If 
he could change his grain into flour, his cattle into beef, 
and his hogs into hams and bacon, not only would he re- 
ceive the fuller profit of his product, but he would render 
his near-by communities more independent of railway 
exigencies, and thereby improve the transportation system 
by relieving it of the burden of his luifinished product. 
The thing is not only reasonable and practicable, but it is 
becoming absolutely necessary. More than that, it is 
being done in many places. But it will not register its 
full effect on the transportation situation and upon the 
cost of living until it is done more widely and in more 
kinds of materials. 

It is one of nature's compensations to withdraw pros- 
perity from the business which does not serve. 

We have found that on the Detroit, Toledo & Ironton 
we could, following our universal policy, reduce our rates 
and get more business. We made some cuts, but the In- 
terstate Commerce Commission refused to allow them! 
Under such conditions why discuss the railroads as a 
business .f^ Or as a service.'^ 


Things in General 

NO MAN exceeds Thomas A. Edison in broad vision 
and understanding. I met him first many years 
ago when I was with the Detroit Edison Company 
— ^probably about 1887 or thereabouts. The electrical 
men held a convention at Atlantic City, and Edison, as the 
leader in electrical science, made an address. I was then 
working on my gasoline engine, and most people, including 
all of my associates in the electrical company, had taken 
pains to tell me that time spent on a gasoline engine was 
time wasted — that the power of the future was to be elec- 
tricity. These criticisms had not made any impression on 
me. I was working ahead with all my might. But being 
in the same room with Edison suggested to me that it 
would be a good idea to find out if the master of electricity 
thought it was going to be the only power in the future. 
So, after Mr. Edison had finished his address, I managed to 
catch him alone for a moment. I told him what I was 
working on. 

At once he was interested. He is interested in every 
search for new knowledge. And then I asked him if he 
thought that there was a future for the internal com- 
bustion engine. He answered something in this fash- 

"Yes, there is a big future for any light-weight engine 
that can develop a high horsepower and be self-contained. 
No one kind of motive power is ever going to do all the 
work of the country. We do not know what electricity 
can do, but I take for granted that it cannot do everything. 



Keep on with your engine. If you can get what you are 
after, I can see a great future." 

That is characteristic of Edison. He was the central 
figure in the electrical industry, which was then young and 
enthusiastic. The rank and file of the electrical men 
could see nothing ahead but electricity, but their leader 
could see with crystal clearness that no one power could 
do all the work of the country. I suppose that is why he 
was the leader. 

Such was my first meeting with Edison. I did not see 
him again until many years after — until our motor had 
been developed and was in production. He remembered 
perfectly our first meeting. Since then we have seen 
each other often. He is one of my closest friends, and we 
together have swapped many an idea. 

His knowledge is almost universal. He is interested in 
every conceivable subject and he recognizes no limita- 
tions. He believes that all things are possible. At the 
same time he keeps his feet on the ground. He goes 
forward step by step. He regards "impossible" as a de^ 
scription for that which we have not at the moment the 
knowledge to achieve. He knows that as we amass knowl- 
edge we build the power to overcome the impossible. 
That is the rational way of doing the "impossible." The 
irrational way is to make the attempt without the toil of 
accumulating knowledge. Edison is really the world's 
greatest scientist. In addition, he has the constructive 
and managerial sense. He has not only had visions, but 
he has made them realities. He has had management of 
men and affairs to a degree unusual in an inventor, who 
is almost always considered visionary. Although not pri- 
marily a business man, he has made himself one by sheer 
necessity. Edison could have done anything to which 
he had turned his mind. He sees through things — and 
there is a great lack of seeing through, to-day. 


John Burroughs was another of those who honoured mo 
with their friendship. I, too, hke birds. I hke the outdoors. 
I hke to walk across country and jump fences. We have 
five hundred bird houses on the farm. We call them our 
bird hotels, and one of them, the Hotel Pontchartrain — a 
martin house — ^has seventy-six apartments. All winter 
long we have wire baskets of food hanging about on the 
trees and then there is a big basin in which the water is 
kept from freezing by an electric heater. Summer and 
winter, food, drink, and shelter are on hand for the birds. 
We have hatched pheasants and quail in incubators 
and then turned them over to electric brooders. We 
have all kinds of bird houses and nests. The sparrows, 
who are great abusers of hospitality, insist that their nests 
be immovable — that they do not sway in the wind; the 
wrens like swaying nests. So we mounted a number of 
wren boxes on strips of spring steel so that they would 
sway in the wind. The wrens liked the idea and the spar- 
rows did not, so we have been able to have the wrens nest 
m peace. In summer we leave cherries on the trees and 
strawberries open in the beds, and I think that we have 
not only more but also more different kinds of bird callers 
than anywhere else in the northern states. John Bur- 
roughs said he thought we had, and one day when he was 
staying at our place he came across a bird that he had 
never seen before. 

About ten years ago we imported a great number of 
birds from abroad — ^yellow-hammers, chaffinches, green 
finches, red pales, twites, bullfinches, jays, linnets, larks — ' 
some five hundred of them. They stayed around a while, 
but where they are now I do not know. I shall not im- 
port any more. Birds are entitled to live where they want 
to live. 

Birds are the best of companions. We need them for 
Jheir beauty and their companionship, and also we need 


them for the strictly economic reason that they destroy 
harmful insects. The only time I ever used the Ford or- 
ganization to influence legislation was on behalf of the 
birds, and I think the end justified the means. The 
Weeks-McLean Bird Bill, providing for bird sanctuaries 
for our migratory birds, had been hanging in Congress with 
every likelihood of dying a natural death. Its immediate 
sponsors could not arouse much interest among the Con- 
gressmen. Birds do not vote. We got behind that bill 
and we asked each of our six thousand dealers to wire to 
his representative in Congress. It began to become ap- 
parent that birds might have votes; the bill went through. 
Our organization has never been used for any political 
purpose and never will be. We assume that our people 
have a right to their own preferences. 

To get back to John Burroughs. Of course I knew who 
he was and I had read nearly everything he had written, 
but I had never thought of meeting him until some years 
ago when he developed a grudge against modern prog- 
ress. He detested money and especially he detested the 
power which money gives to vulgar people to despoil the 
lovely countryside. He grew to dislike the industry out of 
which money is made. He disliked the noise of factor- 
ies and railways. He criticized industrial progress, and 
he declared that the automobile was going to kill the ap- 
preciation of nature. I fundamentally disagreed with 
him. I thought that his emotions had taken him on the 
wrong tack and so I sent him an automobile with the re- 
quest that he try it out and discover for himself whether 
it would not help him to know nature better. That auto- 
mobile — and it took him some time to learn how to man- 
age it himself — completely changed his point of view. He 
found that it helped him to see more, and from the time of 
getting it, he made nearly all of his bird-hunting expedi- 
tions behind the steering wheel. He learned that instead 


of having to confine himself to a few miles around Slab- 
sides, the whole countryside was open to him. 

Out of that automobile grew our friendship, and it was a 
fine one. No man could help being the better for knowing 
John Burroughs. He was not a professional naturalist, 
nor did he make sentiment do for hard research. It is 
easy to grow sentimental out of doors; it is hard to pursue 
the truth about a bird as one would pursue a mechanical 
principle. But John Burroughs did that, and as a result 
the observations he set down were very largely accu- 
rate. He was impatient with men who were not accurate 
in their observations of natural life. John Burroughs first 
loved nature for its own sake ; it was not merely his stock 
of material as a professional writer. He loved it before 
he wrote about it. 

Late in life he turned philosopher. His philosophy was 
not so much a philosophy of nature as it was a natural 
philosophy — the long, serene thoughts of a man who had 
lived in the tranquil spirit of the trees. He was not pagan ; 
he was not pantheist; but he did not much divide between 
nature and human nature, nor between human nature and 
divine. John Burroughs lived a wholesome life. He was 
fortunate to have as his home the farm on which he was 
born. Through long years his surroundings were those 
which made for quietness of mind. He loved the woods 
and he made dusty-minded city people love them, too — ^he 
helped them see what he saw. He did not make much 
beyond a living. He could have done so, perhaps, but 
that was not his aim. Like another American naturalist, 
his occupation could have been described as inspector of 
birds' nests and hillside paths. Of course, that does not 
pay in dollars and cents. 

When he had passed the three score and ten he changed 
his views on industry. Perhaps I had something to do with 
that. He came to see that the whole world could not live 


by hunting birds* nests. At one time in his Hfe, he had a 
grudge against all modern progress, especially where it was 
associated with the burning of coal and the noise of traflSc. 
Perhaps that was as near to literary affectation as he ever 
came. Wordsworth disliked railways too, and Thoreau 
said that he could see more of the country by walking. 
Perhaps it was influences such as these which bent John 
Burroughs for a time against industrial progress. But only 
for a time. He came to see that it was fortunate for him 
that others* tastes ran in other channels, just as it was fortu- 
nate for the world that his taste ran in its own channel. 
There has been no observable development in the method of 
makmg birds' nests since the beginning of recorded observa- 
tion, but that was hardly a reason why human beings should 
not prefer modern sanitary homes to cave dwellings. This 
was a part of John Burroughs 's sanity — ^he was not afraid to 
change his views. He was a lover of Nature, not her dupe. 
In the course of time he came to value and approve modern 
devices,, and though this by itself is an interesting fact, it is 
not so interesting as the fact that he made this change after 
he was seventy years old. John Burroughs was never too 
old to change. He kept growing to the last. The man who 
is too set to change is dead aheady. The funeral is a mere 

If he talked more of one person than another, it was 
Emerson. Not only did he know Emerson by heart as an 
author, but he knew him by heart as a spirit. He taught 
me to know Emerson. He had so saturated himself with 
Emerson that at one time he thought as he did and even 
fell into his mode of expression. But afterward he foimd 
his own way — which for him was better. 

There was no sadness in John Burroughs*s death. "Wlien 
the grain lies brown and ripe under the harvest sun, and 
the harvesters are busy binding it into sheaves, there is no 
sadness for the grain. It has ripened and has fulfilled its 


term, and so had John Burroughs. With him it was full 
ripeness and harvest, not decay. He worked almost to 
the end. His plans ran beyond the end. They buried 
him amid the scenes he loved, and it was his eighty -fourth 
birthday. Those scenes will be preserved as he loved 

John Burroughs, Edison, and I with Harvey S. Firestone 
made several vagabond trips together. We went in 
motor caravans and slept under canvas. Once we gypsied 
through the Adirondacks and again through the Alleghan- 
ies, heading southward. The trips were good fun — except 
that they began to attract too much attention. 

To-day I am more opposed to war than ever I was, and I 
think the people of the world know — even if the politicians 
do not — that war never settles anything. It was war that 
made the orderly and profitable processes of the world 
what they are to-day — a loose, disjointed mass. Of 
course, some men get rich out of war; others get poor. 
But the men who get rich are not those who fought or who 
really helped behind the lines. No patriot makes money 
out of war. No man with true patriotism could make 
money out of war — out of the sacrifice of other men's lives. 
Until the soldier makes money by fighting, until mothers 
make money by giving their sons to death — not until then 
should any citizen make money out of providing his coun- 
try with the means to preserve its life. 

If wars are to continue, it will be harder and harder for 
the upright business man to regard war as a legitimate 
means of high and speedy profits. War fortunes are los- 
ing caste every day. Even greed will some day hesitate 
before the overwhelming unpopularity and opposition 
which will meet the war profiteer. Business should be 
on the side of peace, because peace is business's best asset. 


And, by the way, was inventive genius ever so sterile as it 
was during the war? 

An impartial investigation of the last war, of what pre- 
ceded it and what has come out of it, would show beyond a 
doubt that there is in the world a group of men with vast 
powers of control, that prefers to remain unknown, that 
does not seek office or any of the tokens of power, that 
belongs to no nation whatever but is international- — a 
force that uses every government, every widespread busi- 
ness organization, every agency of publicity, every re- 
source of national psychology, to throw the world into a 
panic for the sake of getting still more power over the 
world. An old gambling trick used to be for the gambler 
to cry "Police!" when a lot of money was on the table, 
and, in the panic that followed, to seize the money and run 
off with it. There is a power within the world which 
cries "War!" and in the confusion of the nations, the un» 
restrained sacrifice which people make for safety and peace 
runs off with the spoils of the panic. 

The point to keep in mind is that, though we won the 
military contest, the world has not yet quite succeeded in 
winning a complete victory over the promoters of war. 
We ought not to forget that wars are a purely manu- 
factured evil and are made according to a definite tech- 
nique. A campaign for war is made upon as definite lines 
as a campaign for any other purpose. First, the people 
are worked upon. By clever tales the people's suspicions 
are aroused toward the nation against whom war is desired. 
Make the nation suspicious; make the other nation sus- 
picious. All you need for this is a few agents with some 
cleverness and no conscience and a press whose interest is 
locked up mth the interests that will be benefited by war. 
Then the "overt act" will soon appear. It is no trick at 
all to get an "overt act" once you work the hatred of two 
nations up to the proper pitch. 


There were men in every country who were glad to see 
the World War begin and sorry to see it stop. Hundreds 
of American fortunes date from the Civil War; thousands 
of new fortunes date from the World War. Nobody can 
deny that war is a profitable business for those who like 
that kind of money. War is an orgy of money, just as it 
is an orgy of blood. 

And we should not so easily be led into war if we con- 
sidered what it is that makes a nation really great. It 
is not the amount of trade that makes a nation great. 
The creation of private fortunes, like the creation of an 
autocracy, does not make any country great. Nor does 
the mere change of an agricultural population into a fac- 
tory population. A country becomes great when, by the 
wise development of its resources and the skill of its 
people, property is widely and fairly distributed. 

Foreign trade is full of delusions. We ought to wish 
for every nation as large a degree of self-support as pos- 
sible. Instead of wishing to keep them dependent on us 
for what we manufacture, we should wish them to learn 
to manufacture themselves and build up a solidly founded 
civilization. When every nation learns to produce the 
things which it can produce, we shall be able to get down to 
a basis of serving each other along those special lines in 
which there can be no competition. The North Temper- 
ate Zone will never be able to compete with the tropics in 
the special products of the tropics. Our country will 
never be a competitor with the Orient in the production 
of tea, nor with the South in the production of rubber. 

A large proportion of our foreign trade is based on the 
backwardness of our foreign customers. Selfishness is a 
motive that would preserve that backwardness. Human- 
ity is a motive that would help the backward nations to a 
self-supporting basis. Take Mexico, for example. We have 
heard a great deal about the "development" of Mexico. 


Exploitation is the word that ought instead to be used. 
When its rich natural resources are exploited for the in- 
crease of the private fortunes of foreign capitalists, that 
is not development, it is ravishment. You can never 
develop Mexico until you develop the Mexican. And yet 
how much of the "development" of Mexico by foreign 
exploiters ever took account of the development of its 
people .^^ The Mexican peon has been regarded as mere 
fuel for the foreign money-makers. Foreign trade has 
been his degradation. 

Short-sighted people are afraid of such counsel. They 
say: "What would become of our foreign trade. 5^" 

When the natives of Africa begin raising their own cot- 
ton and the natives of Russia begin making their own 
farming implements and the natives of China begin sup- 
plying their own wants, it will make a difference, to be 
sure, but does any thoughtful man imagine that the world 
can long continue on the present basis of a few nations 
supplying the needs of the world. f* We must think in 
terms of what the world will be when civilization becomes 
general, when all the peoples have learned to help them- 

When a country goes mad about foreign trade it 
usually depends on other countries for its raw material, 
turns its population into factory fodder, creates a private 
rich class, and lets its own immediate interest lie neglected. 
Here in the United States we have enough work to do 
developing our own country to relieve us of the necessity 
of looking for foreign trade for a long time. We have 
agriculture enough to feed us while we are doing it, and 
money enough to carry the job through. Is there any- 
thing more stupid than the United States standing idle 
because Japan or France or any other country has not 
sent us an order when there is a hundred-year job await- 
ing us in developing our own country? 


Commerce began in service. Men carried off their sur*- 
plus to people who had none. The country that raised 
corn carried it to the country that could raise no corn. 
The lumber country brought wood to the treeless plain. 
The vine country brought fruit to cold northern chmes. 
The pasture country brought meat to the grassless region. 
It was all service. When all the peoples of the world be^ 
come developed in the art of self-support, commerce will 
get back to that basis. Business will once more become 
service. There will be no competition, because the basis 
of competition will have vanished. The varied peoples 
will develop skills which will be in the nature of monopo- 
lies and not competitive. From the beginning, the races 
have exhibited distinct strains of genius: this one for 
government; another for colonization; another for the sea; 
another for art and music; another for agriculture; an- 
other for business, and so on. Lincoln said that this 
nation could not survive half-slave and half -free. The 
human race cannot forever exist half -exploiter and half- 
exploited. Until we become buyers and sellers ahke, pro- 
ducers and consumers alike, keeping the balance not for 
profit but for service, we are going to have topsy-turvy 

France has something to give the world of which no 
competition can cheat her. So has Italy. So has Russia. 
So have the countries of South America. So has Japan. 
So has Britain. So has the United States. The sooner 
we get back to a basis of natural specialties and drop this 
free-for-all system of grab, the sooner we shall be sure of 
international self-respect — and international peace. Try- 
ing to take the trade of the world can promote war. It 
cannot promote prosperity. Some day even the inter- 
national bankers will learn this. 

I have never been able to discover any honourable rea- 
sons for the beginning of the World War. It seems to 


have grown out of a very complicated situation created 
largely by those who thought they could profit by war. I 
believed, on the information that was given to me in 1916, 
that some of the nations were anxious for peace and would 
welcome a demonstration for peace. It was in the hope 
that this was true that I financed the expedition to Stock- 
holm in what has since been called the *' Peace Ship.'* I 
do not regret the attempt. The mere fact that it failed is 
not, to me, conclusive proof that it was not worth trying. 
We learn more from our failures than from our successes. 
What I learned on that trip was worth the time and the 
money expended. I do not now know whether the infor- 
mation as conveyed to me was true or false. I do not care. 
But I think everyone will agree that if it had been possible 
to end the war in 1916 the world would be better off than 
it is to-day. 

For the victors wasted themselves in winning, and the 
vanquished in resisting. Nobody got an advantage, 
honourable or dishonourable, out of that war. I had hoped, 
finally, when the United States entered the war, that it 
might be a war to end wars, but now I know that wars do 
not end wars any more than an extraordinarily large con- 
flagration does away with the fire hazard. When our 
country entered the war, it became the duty of every 
citizen to do his utmost toward seeing through to the end 
that which we had undertaken. I believe that it is the 
duty of the man who opposes war to oppose going to war 
up until the time of its actual declaration. 

My opposition to war is not based upon pacifist or non- 
resistant principles. It may be that the present state ot 
civilization is such that certain international questions 
cannot be discussed; it may be that they have to be fought 
out. But the fighting never settles the question. It only 
gets the participants around to a frame of mind where 
they will agree to discuss what they were fighting about. 


Once we were in the war, every facility of the Ford in- 
dustries was put at the disposal of the Government. We 
had, up to the time of the declaration of war, absolutely 
refused to take war orders from the foreign belligerents. 
It is entirely out of keeping with the principles of our busi- 
ness to disturb the routine of our production unless in an 
emergency. It is at variance with our human principles 
to aid either side in a war in which our country was not 
involved. These principles had no application, once the 
United States entered the war. From April, 1917, until 
November, 1918, our factory worked practically exclu- 
sively for the Government. Of course we made cars and 
parts and special delivery trucks and ambulances as a part 
of our general production, but we also made many other 
articles that were more or less new to us. We made 2j- 
ton and 6-ton trucks. We made Liberty motors in great 
quantities, aero cylinders, 1.55 Mm. and 4.7 Mm. caissons. 
We made listening devices, steel helmets (both at High- 
land Park and Philadelphia), and Eagle Boats, and we 
did a large amount of experimental work on armour plate, 
compensators, and body armour. For the Eagle Boats 
we put up a special plant on the River Rouge site. These 
boats were designed to combat the submarines. They were 
204 feet long, made of steel, and one of the conditions pre- 
cedent to their building was that their construction should 
not interfere with any other line of war production and 
also that they be delivered quickly. The design was 
worked out by the Navy Department. On December 22, 
1917, I offered to build the boats for the Navy. The 
discussion terminated on January 15, 1918, when the 
Navy Department awarded the contract to the Ford 
Company. On July 11th, the first completed boat was 
launched. We made both the hulls and the engines, and 
not a forging or a rolled beam entered into the construction 
of other than the engine. We stamped the hulls entirely 


out of sheet steel. They were built indoors. In four 
months we ran up a building at the River Rouge a third of 
a mile long, 350 feet wide, and 100 feet high, covering more 
than thirteen acres. These boats were not built by marine 
engineers. They were built simply by applying our pro- 
duction principles to a new product. 

With the Armistice, we at once dropped the war and 
went back to peace. 

An able man is a man who can do things, and his ability 
to do things is dependent on what he has in him. ^Miat 
he has in him depends on what he started with and what 
he has done to increase and discipline it. 

An educated man is not one whose memory is trained to 
carry a few dates in history — he is one who can accomplish 
things. A man who cannot think is not an educated man 
however many college degrees he may have acquired. 
Thinking is the hardest work any one can do — which is 
probably the reason why we have so few thinkers. There 
are two extremes to be avoided : one is the attitude of con- 
tempt toward education, the other is the tragic snobbery 
of assuming that marching through an educational system 
is a sure cure for ignorance and mediocrity. You cannot 
learn in any school what the world is going to do next year, 
but you can learn some of the things which the world has 
tried to do in former years, and where it failed and where it 
succeeded. If education consisted in warning the young 
student away from some of the false theories on which men 
have tried to build, so that he may be saved the loss of the 
time in finding out by bitter experience, its good would be 
unquestioned. An education which consists of signposts 
indicating the failure and the fallacies of the past doubt- 
less would be very useful. It is not education just to 
possess the theories of a lot of professors. Speculation is 


very interesting, and sometimes profitable, but it is not 
education. To be learned in science to-day is merely to 
be aware of a hundred theories that have not been proved. 
And not to know what those theories are is to be "un- 
educated," "ignorant," and so forth. If knowledge of 
guesses is learning, tlien one may become learned by the 
simple expedient of making his own guesses. And by the 
same token he can dub the rest of the worid "ignorant" 
because it does not know what his guesses are. But 
the best that education can do for a man is to put him in 
possession of his powers, give him control of the tools with 
which destiny has endowed him, and teach him how to 
think. The college renders its best service as an intellec- 
tual gymnasium, in which mental muscle is developed and 
the student strengthened to do what he can. To say, 
however, that mental gymnastics can be had only in 
college is not true, as every educator knows. A man's real 
education begins after he has left school. True education 
is gained through the discipline of life. 

There are many kinds of knowledge, and it depends on 
what crowd you happen to be in, or how the fashions of 
the day happen to run, which kind of knowledge is most 
respected at the moment. There are fashions in knowl- 
edge, just as there are in everything else. When some 
of us were lads, knowledge used to be limited to the Bible. 
There were certain men in the neighbourhood who knew 
the Book thoroughly, and they were looked up to and 
respected. Biblical knowledge was highly valued then. 
But nowadays it is doubtful whether deep acquaintance 
with the Bible would be sufficient to win a man a name for 

Kjiowledge, to my mind, is something that in the past 
somebody knew and left in a form which enables all 
who will to obtain it. If a man is born with normal 
human faculties, if he is equipped with enough ability to 


use the tools which we call "letters" in reading or writing, 
there is no knowledge within the possession of the race 
that he cannot have — if he wants it! The only reason 
why every man does not know everything that the human 
mind has ever learned is that no one has ever yet found 
it worth while to know that much. Men satisfy their 
minds more by finding out things for themselves than by 
heaping together the things which somebody else has 
found out. You can go out and gather knowledge all 
your life, and with all your gathering you will not catch 
up even with your own times. You may fill your head 
with all the "facts" of all the ages, and your head may 
be just an overloaded fact-box when you get through. 
The point is this : Great piles of knowledge in the head are 
not the same as mental activity. A man may be very 
learned and very useless. And then again, a man may be 
unlearned and very useful. 

The object of education is not to fill a man's mind with 
facts; it is to teach him how to use his mind in thinking. 
And it often happens that a man can think better if he is 
not hampered by the knowledge of the past. 

It is a very human tendency to think that what man- 
kind does not yet know no one can learn. And yet it must 
be perfectly clear to everyone that the past learning of 
mankind cannot be allowed to hinder our future learning. 
Mankind has not gone so very far when you measure its 
progress against the knowledge that is yet to be gained — 
the secrets that are yet to be learned. 

One good way to hinder progress is to fill a man's head 
with all the learning of the past; it makes him feel that 
because his head is full, there is nothing more to learn. 
Merely gathering knowledge may become the most useless 
work a man can do. What can you do to help and heal 
the world .^^ That is the educational test. If a man can 
hold up his own end, he counts for one. If ha can help 


ten or a hundred or a thousand other men hold up their 
ends, he counts for more. He may be quite rusty on 
many things that inliabit the realm of print, but he is a 
learned man just the same. When a man is master of his 
own sphere, whatever it may be, he has won his degree — ' 
he has entered the realm of wisdom. 

The work which we describe as Studies in the Jewish 
Question, and which is variously described by antagonists 
as *'the Jewish campaign," "the attack on the Jews,'* 
"the anti-Semitic pogrom,'* and so forth, needs no ex- 
planation to those who have followed it. Its motives and 
purposes must be judged by the work itself. It is offered 
as a contribution to a question which deeply affects the 
country, a question which is racial at its source, and 
which concerns influences and ideals rather than persons. 
Our statements must be judged by candid readers who are 
intelligent enough to lay our words alongside life as they 
are able to observe it. If our word and their observation 
agree, the case is made. It is perfectly silly to begin to 
damn us before it has been shown that our statements are 
baseless or reckless. The first item to be considered is the 
truth of what we have set forth. And that is precisely 
the item which our critics choose to evade. 

Readers of our articles will see at once that we are not 
actuated by any kind of prejudice, except it may be a prej- 
udice in favour of the principles which have made our 
civilization. There had been observed in this country 
certain streams of influence which were causing a marked 
deterioration in our literature, amusements, and social 
conduct; business was departing from its old-time sub- 
stantial soundness; a general letting down of standards 
was felt everywhere. It was not the robust coarseness of 
the white man, the rude indelicacy, say, of Shakespeare'? 


characters, but a nasty Orientalism which has insidiously 
affected every channel of expression — and to such an ex- 
tent that it was time to challenge it. The fact that these 
influences are all traceable to one racial source is a fact to 
be reckoned with, not by us only, but by the intelligent 
people of the race in question. It is entirely creditable to 
them that steps have been taken by them to remove their 
protection from the more flagrant violators of American 
hospitality, but there is still room to discard outworn 
ideas of racial superiority maintained by economic or in- 
tellectually subversive warfare upon Christian society. 

Our work does not pretend to say the last word on the 
Jew in America. It says only the word which describes 
his obvious present impress on the country. When that 
impress is changed, the report of it can be changed. For 
the present, then, the question is wholly in the Jews' hands. 
If they are as wise as they claim to be, they will labour 
to make Jews American, instead of labouring to make 
America Jewish. The genius of the United States of 
America is Christian in the broadest sense, and its destiny 
is to remain Christian. This carries no sectarian meaning 
with it, but relates to a basic principle which differs from 
other principles in that it provides for hberty with moral- 
ity, and pledges society to a code of relations based on 
fundamental Christian conceptions of human rights and 

As for prejudice or hatred against persons, that is 
neither American nor Christian. Our opposition is only 
to ideas, false ideas, which are sapping the moral stamina 
of the people. These ideas proceed from easily identified 
sources, they are promulgated by easily discoverable 
methods; and they are controlled by mere exposure. We 
have simply used the method of exposure. When people 
learn to identify the source and nature of the influence 
swirling around them, it is sufficient. Let the American. 


people once understand that it is not natural degeneracy, 
but calculated subversion that afflicts us, and they are 
safe. The explanation is the cure. 

This work was taken up without personal motives. 
When it reached a stage where we believed the American 
people could grasp the key, we let it rest for the time. Our 
enemies say that we began it for revenge and that we laid 
[it down in fear. Time will show that our critics are merely 
dealing in evasion because they dare not tackle the main 
question. Time will also show that we are better friends 
to the Jews' best interests than are those who praise them 
to their faces and criticize them behind their backs. 


Democracy and Industry 

PERHAPS no word is more overworked nowadays 
than the word "democracy," and those who shout 
loudest about it, I think, as a rule, want it least. I 
am always suspicious of men who speak ghbly of democ- 
racy. I wonder if they want to set up some kind of a des- 
potism or if they want to have somebody do for them what 
they ought to do for themselves. I am for the kind of 
democracy that gives to each an equal chance accord- 
ing to his ability. I think if we give more attention to 
serving our fellows we shall have less concern with the 
empty forms of government and more concern with the 
things to be done. Thinking of service, we shall not 
bother about good feeling in industry or life; we shall not 
bother about masses and classes, or closed and open shops, 
and such matters as have nothing at all to do with the 
real business of living. We can get down to facts. We 
stand in need of facts. 

It is a shock when the mind awakens to the fact that not 
all of humanity is human — that whole groups of people 
do not regard others with humane feelings. Great efforts 
have been made to have this appear as the attitude of a 
class, but it is really the attitude of all "classes," in so far 
as they are swayed by the false notion of "classes." Be- 
fore, when it was the constant effort of propaganda to 
make the people beHeve that it was only the "rich" who 
were without humane feelings, the opinion became general 
that among the "poor" the humane virtues flourished. 

But the "rich" and the "poor" are both very small 



minorities, and you cannot classify society under such 
heads. There are not enough "rich" and there are not 
enough "poor" to serve the purpose of such classification. 
Rich men have become poor without changing their 
natures, and poor men have become rich, and the problem 
has not been affected by it. 

Between the rich and the poor is the great mass of the 
people who are neither rich nor poor. A society made 
up exclusively of miUionaires would not be different from 
our present society; some of the millionaires would have 
to raise wheat and bake bread and make machinery and 
run trains — else they would all starve to death. Some- 
one must do the work. Really we have no fixed classes. 
We have men who will work and men who will not. Most 
of the "classes" that one reads about are purely fictional. 
Take certain capitalist papers. You will be amazed by 
some of the statements about the labouring class. We who 
have been and still are a part of the labouring class know 
that the statements are untrue. Take certain of the 
labour papers. You are equally amazed by some of the 
statements they make about "capitalists." And yet on 
both sides there is a grain of truth. The man who is a 
capitalist and nothing else, who gambles with the fruits 
of other men's labours, deserves all that is said against 
him. He is in precisely the same class as the cheap gam- 
bler who cheats workingmen out of their wages. The 
statements we read about the labouring class in the capi- 
talistic press are seldom written by managers of great in- 
dustries, but by a class of writers who are writing what 
they think will please their employers. They write what 
they imagine will please. Examine the labour press and 
you will find another class of writers who similarly seek to 
tickle the prejudices which they conceive the labouring 
man to have. Both kinds of writers are mere propagan- 
dists. And propaganda that does not spread facts is self- 


destructive. And it should be. You cannot preach 
patriotism to men for the purpose of getting them to stand 
still while you rob them — and get away with that kind of 
preaching very long. You cannot preach the duty of 
working hard and producing plentifully, and make that a 
screen for an additional profit to yourself. And neither 
can the worker conceal the lack of a day's work by a 

Undoubtedly the employing class possesses facts which 
the employed ought to have in order to construct sound 
opinions and pass fair judgments. Undoubtedly the em- 
ployed possess facts which are equally important to the 
employer. It is extremely doubtful, however, if either 
side has all the facts. And this is where propaganda, even 
if it were possible for it to be entirely successful, is defec- 
tive. It is not desirable that one set of ideas be "put 
over" on a class holding another set of ideas. T\Tiat we 
really need is to get all the ideas together and construct 
from them. 

Take, for instance, this whole matter of union labour 
and the right to strike. 

The only strong group of union men in the country is 
the group that draws salaries from the unions. Some of 
them are very rich. Some of them are interested in in- 
fluencing the affairs of our large institutions of finance. 
Others are so extreme in their so-called socialism that they 
border on Bolshevism and anarchism — their union salaries 
liberating them from the necessity of work so that they 
can devote their energies to subversive propaganda. All 
of them enjoy a certain prestige and power which, in the 
natural course of competition, they could not otherwise 
have won. 

If the official personnel of the labour unions were as 
strong, as honest, as decent, and as plainly wise as the 
bulk of the men who make up the membership, the whole 


movement would have taken on a different complexion 
these last few years. But this official personnel, in the 
main — there are notable exceptions — has not devoted 
itself to an alliance with the naturally strong qualities of 
the workingman; it has rather devoted itself to playing 
upon his weaknesses, principally upon the weaknesses of 
that newly arrived portion of the population which does 
not yet know what Americanism is, and which never will 
know if left to the tutelage of their local union leaders. 

The workingmen, except those few who have been 
inoculated with the fallacious doctrine of "the class war'* 
and who have accepted the philosophy that progress 
consists in fomenting discord in industry ("When you 
get your $12 a day, don't stop at that. Agitate for $14. 
When you get your eight hours a day, don't be a fool 
and grow contented; agitate for six hours. Start some- 
thing! Always start something!"), have the plain sense 
which enables them to recognize that with principles 
accepted and observed, conditions change. The union 
leaders have never seen that. They wish conditions to 
remain as they are, conditions of injustice, provocation, 
strikes, bad feeling, and crippled national life. Else 
where would be the need for union officers.? Every strike 
is a new argument for them; they point to it and say, 
"You see! You still need us." 

The only true labour leader is the one who leads labour to 
work and to wages, and not the leader who leads labour 
to strikes, sabotage, and starvation. The union of labour 
which is coming to the fore in this country is the imion of 
all whose interests are interdependent — whose interests 
are altogether dependent on the usefulness and efficiency 
of the service they render. 

There is a change coming. TVTien the union of "imion 
leaders'* disappears, with it will go the union of blind 
bosses — bosses who never did a decent thing for their em- 


ployees until they were compelled. If the blind boss was 
a disease, the selfish Union leader was the antidote. WTien 
the union leader became the disease, the blind boss became 
the antidote. Both are misfits, both are out of place in 
well-organized society. And they are both disappearing 

It is the blind boss whose voice is heard to-day saying, 
"Now is the time to smash labour, we've got them on the 
run." That voice is going down to silence with the voice 
that preaches "class war." The producers — from the 
men at the drawing board to the men on the moulding floor 
— ^have gotten together in a real union, and they will 
handle their own affairs henceforth. 

The exploitation of dissatisfaction is an established 
business to-day. Its object is not to settle anything, nor 
to get anything done, but to keep dissatisfaction in exist- 
ence. And the instruments used to do this are a whole set 
of false theories and promises which can never be fulfilled 
as long as the earth remains what it is. 

I am not opposed to labour organization. I am not 
opposed to any sort of organization that makes for prog- 
ress. It is organizing to limit production — whether by 
employers or by workers — that matters. 

The workingman himself must be on guard against some 
very dangerous notions — dangerous to himself and to the 
welfare of the country. It is sometimes said that the less a 
worker does, the more jobs he creates for other men. This 
fallacy assumes that idleness is creative. Idleness never 
created a job. It creates only burdens. The industrious 
man never runs his fellow worker out of a job; indeed, it 
is the industrious man who is the partner of the industrious 
manager — who creates more and more business and there- 
fore more and more jobs. It is a great pity that the idea 
should ever have gone abroad among sensible men that by 
"soldiering" on the job they help someone else. A mo- 


inent'3 thought will show the weakness of such an idea. 
The healthy business, the business that is always making 
more and mere opportunities for men to earn an honour- 
able and ample hving, is the business in which every man 
does a day's work of which he is proud. And the country 
that stands most securely is the country in which men 
work honestly and do not play tricks with the means of 
production. We cannot play fast and loose with economic 
laws, because if we do they handle us in very hard ways. 

The fact that a piece of work is now being done by nine 
men which used to be done by ten men does not mean that 
the tenth man is unemployed. He is merely not employed 
on that work, and the pubUc is not carrying the burden of 
his support by paying more than it ought on that work — 
for after all, it is the pubhc that pays! 

Aq industrial concern which is wide enough awake to 
reorganize for efficiency, and honest enough with the 
pubhc to charge it necessary costs and no more, is usually 
such an enterprising concern that it has plenty of jobs at 
which to employ the tenth man. It is bound to grow, 
and growth means jobs. A well-managed concern is al- 
ways seeking to lower the labour cost to the public; and it 
is certain to employ more men than the concern which 
loafs along and makes the pubKc pay the cost of its mis- 

The tenth man was an unnecessary cost. The ultimate 
consumer was paying him. But the fact that he was un- 
necessary on that particular job does not mean that he is 
unnecessary in the work of the world, or even in the work 
of his particular shop. 

The public pays for all mismanagement. More than 
half the trouble with the world to-day is the " soldiering " 
and dilution and cheapness and inefficiency for which the 
people are paying their good money. Wherever two men 
are being paid for what one can do, the people are paying 


double what they ought. And it is a fact that only a 
Kttle while ago in the United States, man for man, we 
were not producing what we did for several years pre^dous 
to the war. 

A day's work means more than merely being "on duty" 
at the shop for the required number of hours. It means 
giving an equivalent in ser\dce for the wage drawn. And 
when that equivalent is tampered with either way — when 
the man gives more than he receives, or receives more than 
he gives — ^it is not long before serious dislocation will be 
manifest. Extend that condition throughout the country, 
and you have a complete upset of business. All that in- 
dustrial difficulty means is the destruction of basic equiva- 
lents in the shop. Management must share the blame 
with labour. INIanagement has been lazy, too — manage- 
ment has found it easier to hire an additional five hundred 
men than to so improve its methods that one hundred men 
of the old force could be released to other work. The 
public was paj^g, and business was booming, and manage- 
ment didn't care a pin. It was no different in the office 
from what it was in the shop. The law of equivalents was 
broken just as much by managers as by workmen. 

Practically nothing of importance is secured by mere de- 
mand. That is why strikes always fail — even though they 
may seem to succeed. A strike which brings higher wages 
or shorter hours and passes on the burden to the commun- 
ity is really unsuccessful. It only makes the industry less 
able to serve — and decreases the nimaber of jobs that it 
can support. This is not to say that no strike is justified 
— it may draw attention to an e\'il. Men can strike with 
justice — that they will thereby get justice is another ques- 
tion. The strike for proper conditions and just rewards 
is justifiable. The pity is that men should be compelled 
to use the strike to get what is theirs by right. No 
American ought to be compelled to strike for his rights. 


He ought to receive them naturally, easily, as a matter of 
course. These justifiable strikes are usually the em* 
ployer's fault. Some employers are not fit for their jobs. 
The employment of men — the direction of their energies, 
the arranging of their rewards in honest ratio to their pro- 
duction and to the prosperity of the business — is no small 
job. An employer may be unfit for his job, just as a man 
at the lathe may be unfit. Justifiable strikes are a sign 
that the boss needs another job — one that he can handle. 
The unfit employer causes more trouble than the unfit 
employee. You can change the latter to another more 
suitable job. But the former must usually be left to the 
law of compensation. The justified strike, then, is one 
that need never have been called if the employer had done 
his work. 

There is a second kind of strike — the strike with a con- 
cealed design. In this kind of strike the workingmen are 
made the tools of some manipulator who seeks his own 
ends through them. To illustrate : Here is a great indus- 
try whose success is due to having met a public need with 
efficient and skillful production. It has a record for jus- 
tice. Such an industry presents a great temptation to 
speculators. If they can only gain control of it they can 
reap rich benefit from all the honest effort that has been 
put into it. They can destroy its beneficiary wage and 
profit-sharing, squeeze every last dollar out of the public, 
the product, and the workingman, and reduce it to the 
plight of other business concerns which are run on low 
principles. The motive may be the personal greed of the 
speculators or they may want to change the policy of a 
business because its example is embarrassing to other em- 
ployers who do not want to do what is right. The in- 
dustry cannot be touched from within, because its men 
have no reason to strike. So another method is adopted* 
The business may keep many outside shops busy supplying 


it with material. If these outside shops can be tied up, 
then that great industry may be crippled. 

So strikes are fomented in the outside industries. 
Every attempt is made to curtail the factory's source of 
supplies. If the workingmen in the outside shops knew 
what the game was, they would refuse to play it, but they 
don't know; they serve as the tools of designing capitalists 
without knowing it. There is one point, however, that 
ought to rouse the suspicions of workingmen engaged 'in 
this kind of strike. If the strike cannot get itself settled, 
no matter what either side offers to do, it is almost positive 
proof that there is a third party interested in having the 
strike continue. That hidden influence does not want a 
settlement on any terms. If such a strike is won by the 
strikers, is the lot of the workingman improved.'^ After 
throwing the industry into the hands of outside specu- 
lators, are the workmen given any better treatment or 

There is a third kind of strike — ^the strike that is pro- 
voked by the money interests for the purpose of giving 
labour a bad name. The American workman has always 
had a reputation for sound judgment. He has not al- 
lowed himself to be led away by every shouter who prom- 
ised to create the millennium out of thin air. He has 
had a mind of his own and has used it. He has always 
recognized the fundamental truth that the absence of 
reason was never made good by the presence of violence. 
In his way the American workingman has won a certain 
prestige with his own people and throughout the world. 
Public opinion has been inclined to regard with respect 
his opinions and desires. But there seems to be a de- 
termined effort to fasten the Bolshevik stain on American 
Labour by inciting it to such impossible attitudes and 
such wholly unheard-of actions as shall change public 
sentiment from respect to criticism. 


Merely avoiding strikes, however, does not promote in- 
dustry. We may say to the workingman: 

"You have a grievance, but the strike is no remedy — it 
only makes the situation worse whether you win or lose." 

Then the workingman may admit this to be true and re- 
frain from striking. Does that settle anything? 

No! If the worker abandons strikes as an unworthy 
means of bringing about desirable conditions, it simply 
means that employers must get busy on their own initia- 
tive and correct defective conditions. 

The experience of the Ford industries with the work- 
ingman has been entirely satisfactory, both in the United 
States and abroad. We have no antagonism to unions, 
but we participate in no arrangements with either em- 
ployee or employer organizations. The wages paid are 
always higher than any reasonable union could think of de- 
manding and the hours of work are always shorter. There 
is nothing that a union membership could do for our peo- 
ple. Some of them may belong to unions, probably the 
majority do not. We do not know and make no attempt 
to find out, for it is a matter of not the slightest concern 
to us. We respect the unions, sympathize with their good 
aims and denounce their bad ones. In turn I think that 
they give us respect, for there has never been any authori- 
tative attempt to come between the men and the manage- 
ment in our plants. Of course radical agitators have tried 
to stir up trouble now and again, but the men have mostly 
regarded them simply as human oddities and their interest 
in them has been the same sort of interest that they would 
have in a four-legged man. 

In England we did meet the trades union question 
squarely in our Manchester plant. The workmen of 
Manchester are mostly unionized, and the usual English 
union restrictions upon output prevail. We took over a 
body plant in which were a number of union carpenters. 


At once the union officers asked to see our executives and 
arrange terms. We deal only with our own employees 
and never with outside representatives, so our people re- 
fused to see the union officials. Thereupon they called 
the carpenters out on strike. The carpenters would not 
strike and were expelled from the union. Then the ex- 
pelled men brought suit against the imion for their share 
of the benefit fund. I do not know how the litigation 
turned out, but that was the end of interference by trades 
union officers with our operations in England. 

We make no attempt to coddle the people who work 
with us. It is absolutely a give-and-take relation. During 
the period in which we largely increased wages we did 
have a considerable supervisory force. The home life of 
the men was investigated and an effort was made to find 
out what they did with their wages. Perhaps at the time 
it was necessary; it gave us valuable information. But it 
would not do at all as a permanent affair and it has been 

We do not believe in the "glad hand," or the profession- 
alized "personal touch," or "human element." It is too 
late in the day for that sort of thing. Men want something 
more than a worthy sentiment. Social conditions are not 
made out of words. They are the net result of the daily 
relations between man and man. The best social spirit is 
evidenced by some act which costs the management some- 
thing and which benefits all. That is the only way to 
prove good intentions and win respect. Propaganda, 
bulletins, lectures — they are nothing. It is the right act 
sincerely done that counts. 

A great business is really too big to be human. It 
grows so large as to supplant the personality of the man. 
In a big business the employer, like the employee, is lost 
in the mass. Together they have created a great pro- 
ductive organization which sends out articles that the 


(vorld buys and pays for in return money that provides a 
livelihood for everyone in the business. The business it* 
self becomes the big thing. 

There is something sacred about a big business which 
provides a living for hundreds and thousands of families. 
When one looks about at the babies coming into the world, 
at the boys and girls going to school, at the young work- 
ingmen who, on the strength of their jobs, are marrying 
and setting up for themselves, at the thousands of homes 
that are being paid for on installments out of the earnings 
of men — when one looks at a great productive organiza- 
tion that is enabling all these things to be done, then the 
continuance of that business becomes a holy trust. It be- 
comes greater and more important than the individuals. 

The employer is but a man like his employees and is 
subject to all the limitations of humanity. He is justified 
in holding his job only as he can fill it. If he can steer 
the business straight, if his men can trust him to run 
his end of the work properly and without endangering 
fjieir security, then he is filling his place. Otherwise he 
is no more fit for his position than would be an infant. 
The employer, like everyone else, is to be judged solely by 
his ability. He may be but a name to the men — a name 
on a signboard. But there is the business — it is more than 
a name. It produces the living — ^and a living is a pretty 
tangible thing. The business is a reality. It does things. 
It is a going concern. The evidence of its fitness is that 
the pay envelopes keep coming. 

You can hardly have too much harmony in business. 
But you can go too far in picking men because they har- 
monize. You can have so much harmony that there will 
not be enough of the thrust and counterthrust which is 
life — enough of the competition which means effort and 
progress. It is one thing for an organization to be work- 
ing harmoniously toward one object, but it is another thing 


for an organization to work harmoniously with each in- 
dividual unit of itself. Some organizations use up so much 
energy and time maintaining a feeling of harmony that 
they have no force left to work for the object for which 
the organization was created. The organization is second- 
ary to the object. The only harmonious organization 
that is worth anything is an organization in which all the 
members are bent on the one main purpose — to get along 
toward the objective. A common purpose, honestly be- 
lieved in, sincerely desired — that is the great harmonizing 

I pity the poor fellow who is so soft and flabby that he 
must always have "an atmosphere of good feeling" aroimd 
him before he can do his work. There are such men. 
And in the end, unless they obtain enough mental and 
moral hardiness to lift them out of their soft reliance on 
"feeling," they are failures. Not only are they business 
failures; they are character failures also; it is as if their 
bones never attained a sufl&cient degree of hardness to 
enable them to stand on their own feet. There is alto- 
gether too much reliance on good feeling in our business 
organizations. People have too great a fondness for 
working with the people they like. In the end it spoils a 
good many valuable qualities. 

Do not misunderstand me; when I use the term "good 
feeling" I mean that habit of making one's personal likes 
and dislikes the sole standard of judgment. Suppose you 
do not like a man. Is that anything against him? It 
may be something against you. What have your likes or 
disHkes to do with the facts,? Every man of common 
sense knows that there are men whom he dislikes, who are 
really more capable than he is himself. 

And taking all this out of the shop and into the broader 
fields, it is not necessary for the rich to love the poor or the 
poor to love the rich. It is not necessary for the employer 


to love the employee or for the employee to love the em- 
ployer. WTiat is necessary is that each should try to do 
justice to the other according to his deserts. That is real 
democracy and not the question of who ought to own the 
bricks and the mortar and the furnaces and the mills. 
And democracy has nothing to do with the question, 
"WTio ought to be boss?'* 

That is very much like asking: "Who ought to be the 
tenor in the quartet?" Obviously, the man who can sing 
tenor. You could not have deposed Caruso. Suppose 
some theory of musical democracy had consigned Caruso 
to the musical proletariat. Would that have reared 
another tenor to take his place? Or would Caruso's gifts 
have still remained his own? 

What We May Expect 

WE ARE — unless I do not read the signs aright 
— in the midst of a change. It is going on all 
about us, slowly and scarcely observed, but 
with a firm surety. We are gradually learning to relate 
cause and effect. A great deal of that which we call dis- 
turbance — a great deal of the upset in what have seemed 
t'^ be established institutions — is really but the surface in- 
dication of something approaching a regeneration. The 
public point of view is changing, and we really need only 
ft somewhat different point of view to make the very bad 
system of the past into a very good system of the future. 
We are displacing that peculiar virtue which used to be 
admired as hard-headedness, and which was really only 
wooden-headedness, with intelligence, and also we are 
getting rid of mushy sentimentalism. The first confused 
hardness with progress; the second confused softness with 
progress. We are getting a better view of the realities and 
are beginning to know that we have already in the world 
all things needful for the fullest kind of a life and that we 
shall use them better once we learn what they are and what 
they mean. 

Whatever is wrong — and we all know that much is 
wrong — can be righted by a clear definition of the wrong- 
ness. We have been looking so much at one another, at 
what one has and another lacks, that we have made a 
personal affair out of something that is too big for per- 
sonalities. To be sure, human nature enters largely into 
our economic problems. Selfishness exists, and doubtless 



it colours all the competitive activities of life. If selfish- 
ness were the characteristic of any one class it might be 
easily dealt with, but it is in human fibre everywhere. 
And greed exists. And envy exists. And jealousy exists. 

But as the struggle for mere existence grows less — ^and 
it is less than it used to be, although the sense of uncer. 
tainty may have increased — we have an opportunity to re- 
lease some of the finer motives. We think less of the frills 
of civilization as we grow used to them. Progress, as the 
world has thus far known it, is accompanied by a great in- 
crease in the things of life. There is more gear, more 
wrought material, in the average American backyard than 
in the whole domain of an African king. The average 
American- boy has more paraphernalia around him than a 
whole Eskimo community. The utensils of kitchen, dining 
room, bedroom, and coal cellar make a list that would have 
staggered the most luxurious potentate of five hundred 
years ago. The increase in the impedimenta of life only 
marks a stage. We are like the Indian who comes into 
town with all his money and buys everything he sees. 
There is no adequate realization of the large proportion 
of the labour and material of industry that is used in 
furnishing the world with its trumpery and trinkets, which 
are made only to be sold, and are bought merely to be 
owned — that perform no service in the world and are at 
last mere rubbish as at first they were mere waste. Hu- 
manity is advancing out of its trinket-making stage, and 
industry is coming down to meet the world's needs, and 
thus we may expect further advancement toward that life 
which many now see, but which the present "good 
enough" stage hinders our attaining. 

And we are growing out of this worship of material 
possessions. It is no longer a distinction to be rich. As 
a matter of fact, to be rich is no longer a common ambition. 
People do not care for money as money, as they once did. 


Certainly they do not stand in awe of it, nor of him who 
possesses it. What we accumulate by way of useless sur- 
plus does us no honour. 

It takes only a moment's thought to see that as far as 
individual personal advantage is concerned, vast accumu- 
lations of money mean nothing. A human being is a hu- 
man being and is nourished by the same amount and 
quality of food, is warmed by the same weight of clothing, 
whether he be rich or poor. And no one can inhabit more 
than one room at a time. 

But if one has visions of service, if one has vast plans 
which no ordinary resources could possibly realize, if one 
has a life ambition to make the industrial desert bloom 
like the rose, and the work-a-day life suddenly blossom 
into fresh and enthusiastic human motives of higher 
character and eflBciency, then one sees in large sums of 
money what the farmer sees in his seed corn — the be- 
ginning of new and richer harvests whose benefits can no 
more be selfishly confined than can the sun's rays. 

There are two fools in this world. One is the millionaire 
who thinks that by hoarding money he can somehow ac- 
cumulate real power, and the other is the penniless re- 
former who thinks that if only he can take the money from 
one class and give it to another, all the world's ills will be 
cured. They are both on the wrong track. They might as 
well try to corner all the checkers or all the dominoes of the 
world under the delusion that they are thereby cornering 
great quantities of skill. Some of the most successful 
money-makers of our times have never added one penny- 
worth to the wealth of men. Does a card player add to 
the wealth of the world? 

K we all created wealth up to the limits, the easy limits, 
of our creative capacity, then it would simply be a case of 
there being enough for everybody, and everybody getting 
enough. Any real scarcity of the necessaries of life in the 


world — not a fictitious scarcity caused by the lack of 
clinking metallic disks in one's purse — is due only to lack 
of production. And lack of production is due only too 
often to lack of knowledge of how and what to produce. 

This much we must believe as a starting point: 

That the earth produces, or is capable of producing^ 
enough to give decent sustenance to everyone — not of food 
alone, but of everything else we need. For everything is 
produced from the earth. 

That it is possible for labour, production, distribution, 
and reward to be so organized as to make certain that 
those who contribute shall receive shares determined by an 
exact justice. 

That regardless of the frailties of human nature, our 
economic system can be so adjusted that selfishness, al- 
though perhaps not abolished, can be robbed of power to 
work serious economic injustice. 

The business of life is easy or hard according to the skill 
or the lack of skill displayed in production and distribution. 
It has been thought that business existed for profit. That 
is wrong. Business exists for service. It is a profession, 
and must have recognized professional ethics, to violate 
which declasses a man. Business needs more of the pro* 
fessional spirit. The professional spirit seeks professional 
integrity, from pride, not from compulsion. The pro- 
fessional spirit detects its own violations and penalizes 
them. Business will some day become clean. A machine 
that stops every little while is an imperfect machine, and 
its imperfection is within itself. A body that falls sick 
every little while is a diseased body, and its disease is 
within itself. So with business. Its faults, many of them 


purely the faults of the moral constitution of business, clog 
its progress and make it sick every little while. Some day 
the ethics of business will be universally recognized, and 
in that day business will be seen to be the oldest and most 
useful of all the professions. 

All that the Ford industries have done — all that I have 
done — is to endeavour to evidence by works that service 
comes before profit and that the sort of business which 
makes the world better for its presence is a noble profession. 
Often it has come to me that what is regarded as the some- 
what remarkable progression of our enterprises — I will 
not say "success," for that word is an epitaph, and we are 
just starting — is due to some accident; and that the 
methods which we have used, while well enough in their 
way, fit only the making of our particular products and 
would not do at all in any other line of business or indeed 
for any products or personalities other than our own. 

It used to be taken for granted that our theories and our 
methods were fundamentally unsound. That is because 
they were not understood. Events have killed that kind 
of comment, but there remains a wholly sincere belief that 
what we have done could not be done by any other com- 
pany — that we have been touched by a wand, that neither 
we nor any one else could make shoes, or hats, or sewing 
machines, or watches, or typewriters, or any other neces- 
sity after the manner in which we make automobiles and 
tractors. And that if only we ventured into other fields 
we should right quickly discover our errors. I do not 
agree with any of this. Nothing has come out of the 
air. The foregoing pages should prove that. We have 
nothing that others might not have. We have had no 
good fortune except that which always attends any one 
who puts his best into his work. There was nothing that 


could be called "favourable" about our beginning. We 
began with almost nothing. TVTiat we have, we earned, 
and we earned it by unremitting labour and faith in a 
principle. We took what was a luxury and turned it into 
a necessity and without trick or subterfuge. When we 
began to make our present motor car the country had few 
good roads, gasoline was scarce, and the idea was firmly 
implanted in the public mind that an automobile was at 
the best a rich man's toy. Our only advantage was lack 
of precedent. 

We began to manufacture according to a creed — a creed 
which was at that time unknown in business. The new is 
always thought odd, and some of us are so constituted that 
we can never get over thinking that anything which is new 
must be odd and probably queer. The mechanical work- 
ing out of our creed is constantly changing. We are con- 
tinually finding new and better ways of putting it into 
practice, but we have not found it necessary to alter the 
principles, and I cannot imagine how it might ever be neces- 
sary to alter them, because I hold that they are absolutely 
universal and must lead to a better and wider life for 

If I did not think so I would not keep working — ^for the 
money that I make is inconsequent. Money is useful 
only as it serves to forward by practical example the 
principle that business is justified only as it serves, that it 
must always give more to the community than it takes 
away, and that unless everybody benefits by the existence 
of a business then that business should not exist. I have 
proved this with automobiles and tractors. I intend to 
prove it with railways and public-service corporations — 
not for my personal satisfaction and not for the money that 
may be earned. (It is perfectly impossible, applying these 
principles, to avoid making a much larger profit than if 
profit were the main object.) I want to prove it so that 


all of us may have more, and that all of us may live better 
by increasing the service rendered by all businesses. Pov- 
erty cannot be abolished by formula; it can be abolished 
only by hard and intelligent work. We are, in effect, an 
experimental station to prove a principle. That we do 
make money is only further proof that we are right. For 
that is a species of argument that establishes itself with- 
out words. 

In the first chapter was set forth the creed. Let me re- 
peat it in the light of the work that has been done under 
it — for it is at the basis of all our work: 

(1) An absence of fear of the future or of veneration for 
the past. One who fears the future, who fears failure, 
limits his activities. Failure is only the opportunity more 
intelligently to begin again. There is no disgrace in 
honest failure; there is disgrace in fearing to fail. What 
is past is useful only as it suggests ways and means for 

(2) A disregard of competition. Whoever does a thing 
best ought to be the one to do it. It is criminal to try to 
get business away from another man — criminal because 
one is then trying to lower for personal gain the condition 
of one's fellow-men, to rule by force instead of by intelli- 

(3) The putting of service before profit. Without a 
profit, business cannot extend. There is nothing inher- 
ently wrong about making a profit. Well-conducted 
business enterprises cannot fail to return a profit but 
profit must and inevitably will come as a reward for good 
service. It cannot be the basis — it must be the result of 

(4) Manufacturing is not buying low and selling high. 
It is the process of buying materials fairly and, with the 
smallest possible addition of cost, transforming those 
materials into a consimiable product and distributing it 


to the consumer. Gambling, speculating, and sharp deal- 
ing tend only to clog this progression. 

We must have production, but it is the spirit behind it 
that counts most. That kind of production which is a 
service inevitably follows a real desire to be of service. 
The various wholly artificial rules set up for finance and 
industry and which pass as "laws" break down with such 
frequency as to prove that they are not even good guesses. 
The basis of all economic reasoning is the earth and its 
products. To make the yield of the earth, in all its forms, 
large enough and dependable enough to serve as the basis 
for real life — the life which is more than eating and sleep- 
ing — is the highest service. That is the real foundation 
for an economic system. We can make things — the prob- 
lem of production has been solved brilliantly. We can 
make any number of different sort of things by the millions. 
The material mode of our life is splendidly provided for. 
There are enough processes and improvements now pig- 
eonholed and awaiting application to bring the physical 
side of life to almost millennial completeness. But we are 
too wrapped up in the things we are doing — we are not 
enough concerned with the reasons why we do them. 
Our whole competitive system, our whole creative ex- 
pression, all the play of our faculties seem to be centred 
around material production and its by-products of success 
and wealth. 

There is, for instance, a feeling that personal or group 
benefit can be had at the expense of other persons or 
groups. There is nothing to be gained by crushing 
any one. If the farmer's bloc should crush the manu- 
facturers would the farmers be better off? If the manu- 
facturer's bloc should crush the farmers, would the 
manufacturers be better off? Could Capital gain by 


crushing Labour? Or Labour by crushing Capital? Or 
does a man in business gain by crushing a competitor? 
No, destructive competition benefits no one. The kind 
of competition which results in the defeat of the many and 
the overlordship of the ruthless few must go. Destruc- 
tive competition lacks the qualities out of which progress 
comes. Progress comes from a generous form of rivalry. 
Bad competition is personal. It works for the aggrandize- 
ment of some individual or group. It is a sort of warfare. 
It is inspired by a desire to "get" someone. It is wholly 
selfish. That is to say, its motive is not pride in the prod- 
uct, nor a desire to excel in service, nor yet a wholesome 
ambition to approach to scientific methods of production. 
It is moved simply by the desire to crowd out others and 
monopolize the market for the sake of the money returns. 
That being accompHshed, it always substitutes a product 
of inferior quality. 

Freeing ourselves from the petty sort of destructive 
competition frees us from many set notions. We are too 
closely tied to old methods and single, one-way uses. We 
need more mobility. We have been using certain things 
just one way, we have been sending certain goods through 
only one channel — and when that use is slack, or that 
channel is stopped, business stops, too, and all the sorry 
consequences of "depression" set in. Take corn, for ex- 
ample. There are millions upon millions of bushels of 
corn stored in the United States with no visible outlet. 
A certain amount of corn is used as food for man and 
beast, but not all of it. In pre-Prohibition days a certain 
amount of corn went into the making of liquor, which was 
not a very good use for good corn. But through a long 
course of years corn followed those two channels, and 
when one of them stopped the stocks of corn began to pile 


up. It is the money fiction that usually retards the move- 
ment of stocks, but ev*^n if money were plentiful we could 
not possibly consume the stores of food which we some- 
times possess. 

If foodstuffs become too plentiful to be consumed as 
food, why not find other uses for them? Why use corn 
only for hogs and distilleries? Why sit down and be- 
moan the terrible disaster that has befallen the corn mar- 
ket? Is there no use for corn besides the making of pork 
or the making of whisky? Surely there must be. There 
should be so many uses for corn that only the important 
uses could ever be fully served; there ought always be 
enough channels open to permit corn to be used without 

Once upon a time the farmers burned com as fuel — com 
was plentiful and coal was scarce. That was a crude way 
to dispose of corn, but it contained the germ of an idea. 
There is fuel in corn; oil and fuel alcohol are obtainable 
from corn, and it is high time that someone was opening up 
this new use so that the stored-up corn crops may be 

Why have only one string to our bow? Why not two? 
If one breaks, there is the other. If the hog business 
slackens, why should not the farmer turn his corn into 
tractor fuel? 

We need more diversity all round. The four-track 
system everywhere would not be a bad idea. We have a 
single-track money system. It is a mighty fine system 
for those who own it. It is a perfect system for the 
interest-collecting, credit-controlling financiers who Kter- 
ally own the commodity called Money and who literally 
own the machinery by which money is made and used. 
Let them keep their system if they like it. But the people 
are finding out that it is a poor system for what we call 
**hard times" because it ties up the line and stops traflic. 


If there are special protections for the interests, there 
ought also to be special protections for the plain people. 
Diversity of outlet, of use, and of financial enablement, 
are the strongest defenses we can have against economic 

It is likewise with Labour. There surely ought to be 
flying squadrons of young men who would be available 
for emergency conditions in harvest field, mine, shop, or 
railroad. If the fires of a hundred industries threaten to 
go out for lack of coal, and one million men are menaced 
by unemployment, it would seem both good business and 
good humanity for a sufficient number of men to volunteer 
for the mines and the railroads. There is always some- 
thing to be done in this world, and only ourselves to do it. 
The whole world may be idle, and in the factory sense 
there may be "nothing to do." There may be nothing 
to do in this place or that, but there is always something 
to do. It is this fact which should urge us to such an 
organization of ourselves that this "something to be 
done" may get done, and unemployment reduced to a 

Every advance begins in a small way and with the in- 
dividual. The mass can be no better than the sum of the 
individuals. Advancement begins within the man him- 
self; when he advances from half -interest to strength of 
purpose; when he advances from hesitancy to decisive 
directness; when he advances from immaturity to matur- 
ity of judgment; when he advances from apprenticeship 
to mastery; when he advances from a mere dilettante at 
labour to a worker who finds a genuine joy in work; when 
he advances from an eye-server to one who can be en- 
trusted to do his work without oversight and without 
prodding — why, then the world advances! The advance 


is not easy. We live in flabby times when men are being 
taught that everything ought to be easy. Work that 
amounts to anything will never be ieasy. And the higher 
you go in the scale of responsibility, the harder becomes 
the job. Ease has its place, of course. Every man who 
works ought to have suflScient leisure. The man who 
works hard should have his easy chair, his comfortable 
fireside, his pleasant surroundings. These are his by 
right. But no one deserves ease until after his work is 
done. It will never be possible to put upholstered ease 
into work. Some work is needlessly hard. It can be 
lightened by proper management. Every device ought to 
be employed to leave a man free to do a man's work. 
Flesh and blood should not be made to bear burdens that 
steel can bear. But even when the best is done, work 
still remains work, and any man who puts himself into 
his job will feel that it is work. 

And there cannot be much picking and choosing. The 
appointed task may be less than was expected. A man's 
real work is not always what he would have chosen to do. 
A man's real work is what he is chosen to do. Just now 
there are more menial jobs than there will be in the future; 
and as long as there are menial jobs, someone will have to 
do them; but there is no reason why a man should be 
penalized because his job is menial. There is one thing 
that can be said about menial jobs that cannot be said 
about a great many so-called more responsible jobs, and 
that is, they are useful and they are respectable and they 
are honest. 

The time has come when drudgery must be taken out of 
labour. It is not work that men object to, but the ele- 
ment of drudgery. We must drive out drudgery wherever 
we find it. We shall never be wholly civilized until we 
remove the treadmill from the daily job. Invention is 
doing this in some degree now. We have succeeded to a 


very great extent in relieving men of the heavier and more 
onerous jobs that used to sap their strength, but even when 
hghtening the heavier labour we have not yet succeeded 
in removing monotony. That is another field that beck- 
ons us — the abolition of monotony, and in trying to ac- 
complish that we shall doubtless discover other changes 
that will have to be made in our system. 

The opportunity to work is now greater than ever it was. 
The opportunity to advance is greater. It is true that the 
young man who enters industry to-day enters a very dif- 
ferent system from that in which the young man of 
twenty-five years ago began his career. The system 
has been tightened up; there is less play or friction in it; 
fewer matters are left to the haphazard will of the indi- 
vidual; the modem worker finds himself part of an organ- 
ization which apparently leaves him little initiative. Yet, 
with all this, it is not true that "men are mere machines." 
It is not true that opportunity has been lost in organiza- 
tion. If the young man will liberate himself from these 
ideas and regard the system as it is, he will find that what 
he thought was a barrier is really an aid. 

Factory organization is not a device to prevent the ex- 
pansion of ability, but a device to reduce the waste and 
losses due to mediocrity. It is not a device to hinder the 
ambitious, clear-headed man from doing his best, but a de- 
vice to prevent the don't-care sort of individual from doing 
his worst. That is to say, when laziness, carelessness, 
slothfulness, and lack-interest are allowed to have their 
own way, everybody suffers. The factory cannot prosper 
and therefore cannot pay living wages. When an organ- 
ization makes it necessary for the don't-care class to do 
better than they naturally would, it is for their benefit — 
they are better physically, mentally, and financially. 


What wages should we be able to pay if we trusted a large 
don't-care class to their own methods and gait of pro- 

If the factory system which brought mediocrity up to a 
higher standard operated also to keep ability down to a 
lower standard — it would be a very bad system, a very 
bad system indeed. But a system, even a perfect one, 
must have able individuals to operate it. No system 
operates itself. And the modern system needs more 
brains for its operation than did the old. More brains 
are needed to-day than ever before, although perhaps they 
are not needed in the same place as they once were. It is 
just like power: formerly every machine was run by foot 
power ; the power was right at the machine. But nowadays 
we have moved the power back — concentrated it in the 
power-house. Thus also we have made it unnecessary for 
the highest types of mental ability to be engaged in every 
operation in the factory. The better brains are in the 
mental power-plant. 

Every business that is growing is at the same time creat- 
ing new places for capable men. It cannot help but do 
so. This does not mean that new openings come every 
day and in groups. Not at all. They come only after hard 
work; it is the fellow who can stand the gaff of routine and 
still keep himself alive and alert who finally gets into 
direction. It is not sensational brilliance that one seeks 
in business, but sound, substantial dependability. Big 
enterprises of necessity move slowly and cautiously. The 
young man with ambition ought to take a long look ahead 
and leave an ample margin of time for things to happen. 

A great many things are going to change. We shall 
learn to be masters rather than servants of Nature. With 
all our fancied skill we still depend largely on natural re- 


sources and think that they cannot be displaced. We dig 
coal and ore and cut down trees. We use the coal and 
the ore and they are gone; the trees cannot be replaced 
within a lifetime. We shall some day harness the heat 
that is all about us and no longer depend on coal — we may 
now create heat through electricity generated by water 
power. We shall improve on that method As chemis- 
try advances I feel quite certain that a method will be 
found to transform growing things into substances that 
will endure better than the metals — we have scarcely 
touched the uses of cotton. Better wood can be made 
than is grown. The spirit of true service will create for 
us. We have only each of us to do our parts sincerely. 

Everything is possible . . . "faith is the substance 
of things hoped for, the evidence of things not seen/* 




Absentees discharged, 111 

Accidents, safeguarding against, 113- 
15; causes of, 114 

Advancement, personal, 96, 277 

Advertisement, first, of Ford Motor 
Co., 64-6 

Agents, 69, 60 

Agriculture, a primary function, 6 

Ainsley, Charles, 33, 34 

Alexander, Henry, drives Ford car to 
top of Ben Nevis, 4,600 feet, in 
1911, 76 

Antecedents, a man's, of no interest 
in hiring at Ford factory, 95 

Assembly of a Ford car, 80; first ex- 
periment in a moving assembly line, 
April 1, 1913, 81 ; results of the ex- 
periment, 81-4 

Automobile, public's first attitude to- 
ward, 85 

Automobile business, bad methods of, 
in its beginnings, 88 

Bankers play too great a part in 
business, 176; in railroads, 224 

Banking, 166, 180 

Bedridden men at work, 109-10 

Benz car on exhibition at Macy's in 
1885, 34 

Birds, Mr, Ford's fondness for, 286 

Blind men can work, 107 

Bolshevism, 4-5, 9 

Bonuses — See "Profit-Sharing" 

Borrowing money, 158 ; what it would 
have meant to Ford Motor Co. in 
1920, 176 

British Board of Agriculture, 196 

British Cabinet and Fordson trac- 
tors, 196-9 

Burroughs, John, 236 

Business, monopoly and profiteering 
bad for, 11; function of, 12 

Buying for immediate needs only, 

Cadillac Company, 36 

Capital, 193-4 

Capitalist newspapers, 254 

Capitalists, 10 

Cash balance, large, 164 

Charity, professional, 206 

City life, 192 

"Classes" mostly fictional, 254 

Classification of work at Ford plants, 

106, 108 
Cleanliness of factory, 114 
Coal used in Ford plants from Ford 

mines, 151 
Coke ovens at River Rouge plant, 

Collier, Colonel D. C, 54 
Competition, 45-6, 275 
Consumption varies according to 

price and quality, 142-^ 
Convict labour, 209 
Cooper, Tom, 50 
Cooperative farming, 205 
Cork, Ireland, Fordson tractor plant, 

150, 197 
Corn, potential uses of, 275 
Costs of production, records of, 98; 

prices force down, 146; high wages 

contribute to low, 147 
Country, living in, 192 
Courtney, F. S., 197 
Creative work, 104 
Creed, industrial, Mr. Ford's, 19-20, 

Cripples can work, 107, 209 
Cross, John E., 197 




Dalby, Prof. W. E., 197 

Deaf and dumb men at work, 110 

Dearborn Independent, 202 

Dearborn plant, 199, 202 

Democracy, 253 

Detroit Automobile Co., 36, 37 

Detroit General Hospital, now Ford 

Hospital, 214 
Detroit, Toledo and Ironton Railway, 

151, 175, 191; purchased by Ford 

Motor Co., in March, 1921, 226 
Development, opportunty for, in 

U. S., 1 
Diamond Manufacturing Co. fire, 167 
Discipline at Ford plants, 110-11 
"Dividends, abolish, rather than 

lower wages," 163 
Dividends, small. Ford policy of, 161 
Doctors, 216 

Dollar, the fluctuating, 180 
Drudgery, 278 

Eagle Boats, 246 

Economy, 186 

Edison, Thomas A., 234 

Educated man, an, definition of, 247 

Education, Mr. Ford's ideas on, 247- 

Educational Department, 111 

Electricity generated at Ford plants, 

"Employees, all, are really partners," 

Employment Department, 100 

Equal, all men are not, 10, 184 

Experience, lack of, no bar to em- 
ployment, 95, 112 

Experiments, no record of, kept at 
Ford factories, 85 

"Experts," no, at Ford plants, 28, 86 

Factory, Ford, growth of, 71, 74 

Factory organization, function of, 

Failure, habit of, 220 

Farming, lack of knowledge in, 16; 
no conflict between, and industry, 
188; future development in, 205 

Farming with tractors, 195 

Fear, 219-20 

Federal Reserve System, 177 

Fighting, a cause for immediate dis- 
charge, 113 

Finance, 156 

Financial crisis in 1921, how Ford 
Motor Co. met, 169 

Financial system at present inade- 
quate, 132, 177 

Firestone, Harvey S., 240 

Flat Rock plant, 191 

Floor space for workers, 113 

Flour-milling, 205 

Foodstuffs, potential uses of, 276 

Ford car— the first, 21, 30-4; No. 
6,000,000, 21; the second, 33; in- 
troduction of, in England in 1903, 
75-6; about 6,000 parts in, 79; 
sales and production — See "Sales" 

Ford, Henry — Born at Dearborn, 
Mich., July 30, 1863, 22; mechan- 
ically inclined, 22-23; leaves school 
at seventeen, becomes apprentice 
at Drydock Engine Works, 24; 
■watch repairer, 24; works with lo- 
cal representative of Westinghouse 
Co. as expert in setting up and re- 
pairing road engines, 25; builds f 
steam tractor in his workshop, 26; 
reads of the "silent gas engine" in 
the World of Science, 27; in 1887 
builds one on the Otto four-cycle 
model, 28; father gives him forty 
acres of timber land, 29; marriage, 
29; in 1890 begins work on double- 
cylinder engine, 29; leaves farm 
and works as engineer and machin- 
ist with the Detroit Electric Co., 
30; rents house in Detroit and sets 
up workshop in back yard, 30; in 
1892 completes first motor car, 30; 
first road test in 1893, 32; builds 
second motor car, 33; quits job 
with Electric Co. August 15, 1899, 
and goes into automobile business, 
35; organization of Detroit Auto- 
mobile Co., 36; resigns from, in 
March, 1902, 36 ; rents shop to con- 
tinue experiments, at 81 Park 



Place, Detroit, 37; beats Alexander 
Winton in race, 37; early reflec- 
tions on business, 37-46; in 1903 
builds, with Tom Cooper, two cars, 
the "999" and the "Arrow" for 
speed, 50; forms the Ford Motor 
Co., 61; buys controlling share in 
1906, 52; builds "Model A," 64; 
builds "Model B" and "Model C," 
67; makes a record in race over ice 
in the "Arrow," 67; builds first real 
manufacturing plant, 58; in May, 
1908, assembles 311 cars in six 
workings days, 58; in June, 1908, 
assembles one hundred cars in one 
day, 68; in 1909, decides to manu- 
facture only "Model T," painted 
black, 72; buys sixty acres of land 
for plant at Highland Park, out- 
side of Detroit, 73; how he met the 
financial crises of 1921, 169; buys 
Detroit, Toledo & Ironton Ry., 
March, 1921, 226 

"Ford doesn't use the Ford," 146 

Ford, Edsel, 52, 173 

Ford Hospital, 214 

Ford Motor Co., organized 1903, 51; 
Henry Ford buys controlling share 
in 1906, 52; how it met financial 
crisis in 1921, 169; thirty-five 
branches of, in U. S. 173 

"Ford, you can dissect a, but you 
cannot kill it," 64 

Fordson tractor, prices, 147, 202-3; 
genesis and development of, 200-3; 
cost of farming with, 203-4; 5,000 
sent to England in 1917-18, 195 

Foreign trade, 242 

Gas from coke ovens at River Rouge 
plant utilized, 151-2 

•*Gold is not wealth," 182 

"Good feeling" in working not essen- 
tial, though desirable, 264-5 

Government, the function of, 8 

Greaves, R. N., 197 

Greed vs. service, 19 

Greenhall, Gilbert, 197 

Grosse Point track, 51 

"Habit conduces to a certain inertia," 

Highland Park plant, 73, 84r-5 
Hobbs, Robert W., 197 
Hospital, Ford, 214 
Hough, Judge, renders decision 

against Ford Motor Co. in Selden 

Patent suit, 62 
Hours of labour per day reduced from 

nine to eight in January, 1914, 126 
"Human, a great business is too big 

to be," 263-66 
Human element in business, 121 

Ideas, old and new, 2-3, 17 
Improvements in products, 16, 17 
Interstate Commerce Commission, 

230, 233 
Inventory, cutting down, by im- 
proved freight service, 176 
Investment, interest on, not properly 
chargeable to operating expenses, 

Jacobs, Edmund, 64 

"Jail, men in, ought to be able to 

support their families," 209 
Jewish question, studies in the, 250-2 
Jobs, menial, 278 
"John R. Street," 82-3 

Labour, the economic fundamental, 
9; and Capital, 276; potential uses 
of, 277 

Labour leaders, 256 

Labour newspapers, 264 

Labour turnover. 111, 129-30 

"Lawyers, like bankers, know abso- 
lutely nothing about business," 224 

Legislation, the function of, 7 

Licensed Association, 62 

"Life is not a location, but a jour- 
ney," 43 

Light for working, 113 

Loss, taking a, in times of business 
depression, 136-38, 143 

Manchester, En :., Ford plant at, 
150; strike at, 262-3 



Machinery, its place in life, 2 

Manufacture, a primary function, 6 

Medical Department, 112 

Mexico, 242-3 

Milner, Lord, 198-9 

Models— "A," 64, 69-70, 76; "B," 67, 
69-70; "C," 57, 69-70, 76; "F," 69; 
"K," 66, 69-70; "N," "R," "S," 69- 
70; 'T," 21, 6&-71, 76, 78, 87; 
changing, not a Ford policy, 148-9 

Money, chasing, 12; present system 
of, 13, 132, 177; what it is worth, 
40; invested in a business not 
chargeable to it, 39-40; fluctuating 
value of, 180; is not wealth, 182 

Monopoly, bad for business, 11 

Monotonous work, 105 

Motion, waste, eliminating, 87-90 

Northville, Mich., plant, combination 
farm and factory, 190 

Oldfield, Barney, 61 

Opportunity for young men of to- 
day, 279 

Organization, excess, and red tape, 91 

Overman, Henry, 197 

Otto engine, 27-8 

Overhead charge per car, cut from 
$146 to $93, 174 

Parts, about 5,000, in a Ford car, 79 

Paternalism has no place in industry, 

"Peace Ship," 245 

Philanthropy, 210 

Physical incapacity not necessarily 
a hindrance to working, 107 

Physicians, 216 

Piquette plant, 58, 85, 89 

Poverty, 184 

Power-farming, 195 

Price policy, Mr. Ford's, 161-2 

Producer depends upon service, 12-13 

Production, principles of Ford plant, 
77; plan of, worked out carefully, 
166. (For production of Ford 
cars, see "Sales" and table of pro- 
duction on p. 145) 

Professional charity, 206 

Profiteering, bad for business, 11 

Profit-sharing, 125-180 

Property, the right of, 9 

Profit, small per article, large aggre- 
gate, 161 

Profits belong to planner, producer, 
and purchaser, 164 

Price raising, 73; reducing, 160 

"Prices, If, of goods are above the 
incomes of the people, then get the 
prices down to the incomes," 135 

"Prices, unduly high, always a sign 
of unsound business," 141 

Prices of Ford touring cars since 
1909, 145 

Prison laws, 209 

"Prisoners ought to be able to sup- 
port their families," 209 

Railroads, active managers have 

ceased to manage, 222; suffering 

from bankers and lawyers, 223-4; 

folly of long hauls, 230-33 
Reactionaries, 5-6 
Red tape, 91 
"Refinancing," 40 
Reformers, 3, 5-6 
Repetitive labour, 103 
"Rich, It is no longer a distinction 

to be," 268-9 
Right of property, 9 
River Rouge plant, 74, 84, 86, 151, 

202, 224, 246 
Routine work, 103 
Royal Agricultural Society, 196 
Rumours in 1920 that Ford Motor Co. 

was in a bad financial condition, 

Russia, under Sovietism, 4 

Safeguarding machines, 113-15 
"Sales depend upon wages," 124 
Sales of Ford cars in 1903-4, 1,708 
cars, 54; in 1904-5, 1,695 cars, 57; 
1905-6, 1,599 cars, 68; 1906-7. 
8,423 cars, 68; 1907-8, 6,398 cars, 
59; 1908-9, 10,607 cars, 71; 1909- 
la 18,664 cars, 74; 1910-11. 34.- 



528 cars, 74; see also table of pro- 
duction since 1909, p. 145 
Saturation, point of, 154 
Saving habit, 187 
Schools, trade, 210; Henry Ford 

Trade School, 211 
Scottish Reliability Trials, test of 

Ford car in, 76 
Scrap, utilization of, 149 
Seasonal unemployment, 166, 188 
Selden, George B., 61 
Selden Patent, 45; famous suit 

against Ford Motor Co., in 1909, 

Service, principles of, 19-20; "the 

foundation of real business," 41; 

"comes before profit," 271 
Simplicity, philosophy of, 13-15 
Social Department, 129 
Sorensen, Charles E., 197-9 
Standard Oil Co., 157 
Standardization, 48-9, 148 
Statistics abolished in 1920, 174 
Steel, vanadium, 18, 66 
Strelow's carpenter shop, 62 
Strike, the right to, 255 
Strikes, 255-266; why, fail, 259 
Suggestions from employees, 100 
Surgeons' fees, 216 
Sweepings, saving, nets $6,000 a year, 


Titles, no, to jobs at Ford factory, 

Tractor— iSee "Fordson" 
Trade, foreign, 242 
Trade schools, 210; Henry Ford 

Trade School. 211 

Training, little, required for jobs at 

Ford plants, 110 
Transportation, a primary fimction, 6 
Turnover of goods, 167, 176 

Union labour, 256 
Universal car, essential attributes of, 

Vanadium steel, 18, 66 
Ventilation of factory, 113, 114 

Wages, minimum of $6 a day at all 
Ford plants, 116, 134; are partner- 
ship distributions, 121; fallacy of 
regulating, on basis of cost of, 
living, 122-3; sales depend upon 
124; minimum of $6 a day in- 
troduced in January, 1914, 126; 
danger in rapidly raising, 128; 
cutting, a slovenly way to meet 
business depression, 136; high, 
contribute to low cost, 147; abolish 
dividends rather than lower, 163 

War, opposition to, 240; Ford indus- 
tries in the, 246 

Waste, vs. service, 19; eliminating, 
87-90, 185 

Weeks-McLean Bird Bill, 237 

Weight, excess, in an automobile, 53 

Welfare work — See "Social Depart- 
ment," "Medical Department," and 
"Educational Department." 

Winton, Alexander, 37 

Women, married, whose husbands 
have jobs, not employed at Ford 
plants. 111 

Work— its place in life, 3; the right 
to, 10